Late payment debt burden rises to £23.4 billion
December 9, 2019
The UK SME late payment debt has risen to a staggering £23.4 billion, up £10.4 billion on the £13 billion owed in 2018 - according to figures released by Pay.UK, which runs the Bacs Direct Credit and Direct Debit payment services.
The research also shows that UK SMEs are now facing a total bill of £4.4 billion a year, just to collect money they are owed, with around a quarter (22 per cent) of those waiting on funds spending more than £500 a month chasing payments.
The number of businesses experiencing overdue payments has now hit 54 per cent - the highest level since 2015, when the figure stood at 55 per cent.
The average late payment debt burden has also increased to £25,000 per company, up from just over £17,000 in 2018, with SMEs reporting that, on average, a debt burden of £35,000 could jeopardise their business. Petty sobering reading, however you look at it...
Of those SMEs impacted by delayed payments, 63 per cent say they have a negative effect on their businesses. More than a third (35 per cent) are forced to rely on bank overdrafts, while almost a quarter (24 per cent) say that being paid late forces them to hold off paying their own suppliers.
The research also reveals that 13 per cent of SMEs experiencing late payments struggle to pay their business bills, 12 per cent have difficulties paying their own staff on time, and 10 per cent have to rely on invoice financing to draw cash into their businesses.
Other headline findings from the Pay.UK Late Payments research include:
- Eight out of ten private sector late payments are owed to SMEs by other SMEs
- 78 per cent of SMEs say they are being forced to wait a month, or longer, beyond agreed payment terms before being paid
- Some 45 per cent of SMEs say they are being kept waiting two months or more before being paid
- 24 per cent of business owners say they take a cut in their own salaries just to keep cash inside their businesses.
For further press information, please contact:
Damion Clark at Real PR (Consultants) LLP. Tel: 01353 667934 or 07789 911314 Email: email@example.com