The number of small and medium-sized enterprises with enough cash to support their growth has fallen in the last four years.
One of the main reasons for this – according to a study by Bibby Finances – is because clients and customers are often late making payments on outstanding debts.
The findings have prompted calls for bigger businesses in the UK to support SMEs by making sure they clear their invoices promptly.
Andy Tait, sales and marketing director at Bibby, said, “The result of late payment is a dent in working capital as firms look to fix the problem of slow-paying clients with unsustainable sources of finance such as credit cards.”
What’s more, it has resulted in the number of firms with cash available to invest in their growth dropping from 20 per cent to two per cent since 2009.
Cash flow is the lifeblood of many small firms, so make sure your SME isn’t affected by this issue – seek expert help or more financial support to buffer instances of late payments.
Posted by the Secret Businessman