New research has revealed late payment problems have worsened for 27% of the UKs SMEs in the last 12 months, according to research conducted by Purbeck Insurance Services.
The study also shows that 29% are experiencing worsening cash flow problems and 30% have found that access to finance has become harder. The findings also show that concerns over the economic uncertainty have deteriorated over the past year for 67% of the small business owners surveyed, for 60%, exchange volatility has made their business harder.
The report also found that almost a third of UK small- and medium-sized enterprises (SMEs) have found it harder to access finance , 56 per cent said the ability to access finance had stayed the same over the past year, while just 14 per cent said it had become easier.
Two thirds of respondents said they had increasing uncertainty about the economy, while 59 per cent said exchange rate volatility had made their business harder. When it comes to managing cashflow, 29 per cent of respondents said they were finding it more difficult than the previous year, while 53 per cent reported similar conditions.
Todd Davison, Director of Purbeck Insurance Services, said “We welcome the Government’s new proposals which include fines for larger businesses who pay their small business suppliers late and reforms to the Prompt Payment Code. Late payment has a huge impact on cashflow – and poor cashflow kills businesses. Small businesses have simply lacked the muscle to make their larger customers pay on time and big businesses have used this to their advantage – we hope these measures will shift the balance of power. ”
“When funding becomes a problem, cashflow dries up and late payment increases, creating a vicious circle where SMEs aren’t paid so stall payments themselves.”
Purbeck Insurance Services commissioned a Censuswide Survey of 500 owners and directors of UK SMEs.