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Late payments continue to blight life for SMEs

Microscope contributor

There are increasing calls of alarm at the growing number of SMEs being impacted by late payments.

In the last couple of weeks research from a number of sources including the Barclays Local Business Late Payment Survey has shown that the days that small companies have to wait to get paid are getting longer.

The Barclays survey highlighted a 20% increase in late payments in the last year with the value of bills that are taking longer than 30 days to settle rising by £1.7bn to £10bn.

The bank calculated that on the average day a small business in England and Wales is owed £2,440.

John Davis, marketing director for Barclays Local Business,said that despite some positive signs in the economy the late payments problem was becoming worse.

"This is a serious issue for the businesses we talked to, around a third [32 per cent] say it threatens their day-to-day survival,” he said.

A spokesman for the Federation of Small Businesses (FSB)said that its most recent survey on the issue back in April showed that 40% of its members had seen payment times worsen.

“One in ten business failures are down to late payments. There is legislation that allows an SME to charge 8% above base rate on contracts that are paid late but most are scare to do that,” said an FSB spokesman.


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