The latest Business in Britain report from Lloyds Bank Commercial Banking has revealed that SMEs in Britain are owed more than £586billion in outstanding invoices.
The average small business is owed more than £108,000 in unpaid invoices, which is an increase of 8% compared to January this year, when the last Business in Britain report was conducted. Almost a third of firms (29%) have said that late payments are the biggest cause of cashflow problems.
According to the report, more than 1.5million SMEs (29%) are currently owed more than £200,000 in outstanding invoices, up from 1.3million (25%) in January.
The issue of late payments is likely to persist into 2017, says Lloyds, with nearly a third (30%) of businesses expecting more customers to require deferred payment terms in the next six months.
“If businesses are issuing more invoices and investing in more assets, then this is very positive for them and the economy,” commented Adrian Walker, managing director, head of global transaction banking at Lloyds.
“But if companies are having to wait longer to be paid, and are reporting that they expect to face an even longer wait in the future, this slowing of payments could be holding businesses back from releasing critical cash to drive future growth,” he added.
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