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Peer2Peer Finance News | August 18, 2019

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SME payment terms have got worse since the Brexit vote

SME payment terms have got worse since the Brexit vote
Marc Shoffman

ONE IN 10 small- and medium-sized enterprises (SMEs) have seen payment terms worsen over the past 12 months, research claims.

A poll of more than 1,000 SMEs, by supply chain finance provider Crossflow Payments, found eight per cent are coming under further pressure as customers increase payment terms as a result of Brexit uncertainty.

The survey also showed that 38 per cent of SMEs have no set payment terms, while 23 per cent say they regularly receive payments late.

Of those receiving payments late, 55 per cent are left waiting 10 days or more beyond their contracted terms.

Read more: £266bn of late payments hamper SME growth

Read more: SME access to finance ‘worse outside London’

The late payments also have a knock-on effect, with 16 per cent of SMEs having to delay their own payments to suppliers and nine per cent finding it tough to pay staff.

“There is no doubt that UK SMEs are facing a working capital crisis at the worst possible time,” Tony Duggan, chief executive of Crossflow Payments, said.

“We face a difficult economic future as we prepare to leave the EU, so we need to find solutions for our homegrown businesses to be well placed for Brexit.

“We need to look at these new financing solutions and a fresh approach to avoid subjugating UK enterprises and putting our economy at risk.

“Businesses of all sizes need to address this growing crisis and explore innovative approaches offered by the alternative finance and fintech community to sit alongside more traditional providers.”

Read more: SMEs strained by late council payments