Monday 29th Oct 2018
Late payment hot spots
There has been a lot of talk recently about late payments and the impact they have on SME businesses, so we thought we’d conduct a bit of research to look at how bad the situation actually is. What we also did was break this down by regions to try and understand if this was more of an issue in one area than the other. The results below make for some interesting reading –
As you can see the West Midlands is leading the way in relation to payments being settled after 60 days, and all regions are suffering from average debtor days over what many would consider the norm of 60 days. On average across all regions the latest payment day is 109 days. But what impact does this have on business?
With many SME’s living hand to mouth and relying on the swift payment of invoices to cover overheads, the continual delay in these payments can have a major knock on effect to both the survival of their business and also their growth plans.
Therefore, it comes as little surprise that the alternative lending market has seen an increase in the number of businesses turning to it, with The Asset Based Finance Association (ABFA) predicting asset-based lending to UK and Irish companies will reach £20 billion in 2015. We too have seen a 22% increase in year-on-year client growth as invoice finance remains a viable alternative for growing SME businesses.
So, whilst the government try and tackle these issues through their enterprise bills, businesses should be aware that help and support is out there for them through a wide range of innovative cash flow solutions now on the market.