The amount of money owed to UK SMEs in late payments has risen to an average £147,141 – up by almost £74,000 compared to 2019, according to a report.
Dun and Bradstreet’s annual SME report found late payments were having a “crippling impact” on businesses.
The report said 69% of SMEs in the survey had applied for extra funding over the past two years – compared to 48% in 2018 and 2019 – and 30% of SME retail bosses had accessed a mortgage.
David Marshall, senior director, finance solutions at Dun and Bradstreet, said: “There are over 5m SMEs in our country and change is something every one of them has had to face. The crippling impact of late payments was an immense burden on businesses – even before the turbulence of the last few years – and as our research shows, it’s only getting worse.”
However, despite the “enormous strain placed on SMEs”, 71% thought they would still be profitable this year and 66% felt confident in job security. A quarter said the Covid pandemic had aided growth over the past year “likely due to the spike in digital transformation as SMEs embraced new ways of working”.
Marshall said there was “light at the end of the tunnel”.
“Despite the widely acknowledged risk of recession in the UK, SME owners are feeling upbeat about the future,” he said. “Hard work and entrepreneurial spirit are of course vital, but they alone aren’t enough.
“It’s now about working smarter, faster and taking advantage of the tools and intelligence at their disposal to move closer to customers, drive efficiency and unlock new revenue streams. Businesses that use data in this way will be more competitive and able to adapt to future challenges.”
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