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  • Kevin Johnston

Working Capital funding

Updated: May 9, 2022

Are Late Payments from customers straining cashflow?

When you supply goods and services, you expect to be paid, and promptly, but within the UK there is a deeply embedded culture of late payments. Indeed, for some businesses, delaying payment is an essential part of the business model. Outstanding payments are problematic for various reasons. First, there’s the basic problem of cash flow within the supplying business – electricity bills, rent and other regular outgoings need to be paid regardless. Late payments could affect the cash available to companies for expenses such as staff salaries, supplies, rent and expenses for operations. Then there’s the time spent chasing late payments. Late payments can lead to massive amounts of resources being eaten up to pursue debts, both financially and in terms of time spent. For the smallest businesses, the problem can be particularly acute. As a result, many businesses simply go to the wall. There are a few options available to boost cash flow while waiting for those late payments. Working Capital products include; bank overdraft / loan, invoice discounting, factoring, Merchant Card Advance, Stock Credit line, asset finance, trade finance and other longer term funding. The majority of the above will be based on the trading activity of the business with little or no security to be offered. Every business has different needs so we can assess each individually against suitable funding. Some statistics on late payments: - One in five businesses surveyed by the BCM said late payments were a problem, an increase on late year, with almost a quarter (24%) reporting the same - An estimated 50,000 businesses a year close as a result of late payments - 92% of businesses admit to paying their suppliers late - 82% of SMEs say late payments are a ‘significant issue’, with many in this group saying they decided not to take any action for fear of putting their client relationship at risk - SMEs are owned £16bn in late payments

Contact us if you would like to discuss funding options for your business.

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