70% of small firms suffer from late payments

With 4,000 firms collapsing in 2008 due to late payments research revealing that 70% of small firms are suffering from late payments is causing alarm 
Over 70% of small and medium-sized businesses have suffered from late payments in the last year, according to data released by Natwest.

This coincides with data produced from payment group BACS and the Royal Bank of Scotland (RBS).

BACS data showed small firms waited an average of 41 days longer than original agreed terms before being paid.

The RBS study revealed that in the UK firms were owed approximately £62bn in bills that were unpaid beyond the agreed deadline. Of this, around £15bn was more than 120 days overdue.
small firms waited an average of 41 days longer than original agreed terms before being paid

NatWest and RBS estimate less than 50% of small firms have taken action, with 11% hiring an in-house credit controller, 9% using invoice discounting and 8% factoring to ease cash flow pressures.

Banks are urging small firms to use their services to alleviate the problems but many businesses are fearful of incurring extra charges and, since the recession, the relationship between banks and small business owners has become strained. 

"It's a huge problem for small businesses. Banks are not loaning and giving overdrafts which means small firms feel like banks themselves. Large firms are improving their cash flow on the back of smaller suppliers," said Stephen Alambritis of the Federation of Small Businesses.

The FPB estimate that approximately 4,000 firms collapsed in 2008 due to late payments.
 

 
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