UK small businesses owed almost £255bn in late payments
43,000 UK small firms are individually owed more than £1m - businesses say government is not doing enough to help resolve the issue of late payments
More than half (53%) of the UK's small businesses are owed an estimated £255bn in outstanding payments, according to research from the latest Zurich SME Risk Index.
Of the 600 small firms surveyed, one in five (20%) claimed they are owed more than £25,000 in late payments, with a further one in 10 (8%) owed more than £100,000. More worryingly, the study estimates that over 43,000 (1%) of businesses in the UK are each awaiting overdue payments of £1m.
Two thirds (67%) of respondents agreed that late payments had resulted in forced closure, with two in five (41%) stating that overdue payments had caused cash flow problems in their own businesses.
29% said they thought the government was doing all it could to help resolve the issue of late payments, while the majority (49%) said that the government was not doing enough to support small businesses affected by the problem.
Jason Eatock, head of small and medium-sized enterprises at Zurich, commented: “£255bn owed in late payments to British businesses is an enormous sum and it is no surprise that many have experienced cash flow problems as a result.
“We have been warned about a “cocktail of threats” to the economy, and small businesses will need all the capital at their disposal to weather this potential storm.
“In an uncertain economic climate, it is imperative that small businesses receive the support and guidance they need to adequately address the central concerns threatening the viability of their businesses.”