50,000 SMEs Close due to Late Payments
Research has revealed that late customer payments are leading to 50,000 SME closures annually and costing the UK economy £2.5billion a year.
Aamar Aslam CEO of Funding Invoice, an alternative lending firm, has commented on the news urging the government to appoint a Small Business Commissioner, a position promised 18 months ago, in addition to offering advise to SMEs facing the burden of late payments.
“The Federation of Small Businesses’ research revealing that the UK economy is losing out on £2.5 billion a year as a result of late customer payments is shocking. These small businesses have been waiting for over 18 months for a Small Business Commissioner to be appointed, to help ease the burden that late payments can – and evidently are – having on our country’s SMEs.
In the meantime, SMEs should consider their financial support options and look for third party support to help alleviate these cashflow problems before they become fatal to the business. Many small businesses are understandably cautious about upsetting new and existing clients by chasing late payments, but it is clear from these figures that the financial stability of a business must take priority, to prevent further insolvencies in the future.”