More than half (52%) of Britain’s small-and-medium sized enterprises are owed in total an estimated £44.6 billion in late payments, new research has found.
The latest SME Risk Index from Zurich revealed that 21% of respondents are owed more than £25,000 and 9% are owed more than £100,000.
Of those who have experienced late payments, almost two thirds (64%) experience typical delays of more than one month on payments which are already more than 30 days overdue.
Almost half (45%) are subject to payment delays of up to three months on late payments, while considerably more than one in ten (14%) typically wait up to six months.
Small business owners are seeing the devastating effects of late payments in the market, as almost two thirds (65%) agree that late payments are leading to SMEs being forced to close down.
Nearly two in five (39%) confirmed that late payments have had a significant impact on their own business’ cash flow, while almost a quarter (24%) said that late payments had caused their business to go into its overdraft in the past.
"On an individual basis, many small businesses are owed hundreds of thousands of pounds,” commented Paul Tombs, Head of SME Proposition at Zurich. “In an environment where cash flow is key to small business survival, the situation is simply unsustainable. It is imperative that SME owners receive the support and guidance required and fair access to the funds that they are owed to secure the future of their businesses."
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