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What SME unpaid invoice debt means for non-bank finance

UK SMEs are writing off unpaid invoice debts worth £134 million every day. This astonishing figure and its impact on this core business sector underline the importance of non-bank finance to these businesses.

According to new research from Amicus, on average, every SME is writing off over £11,000 in unpaid invoices every year. The worse-hit companies are those in the 50-249 employee bracket – a quarter of the invoices they send out are not paid on time. Unsurprisingly, 20% of companies questioned said that they had suffered cashflow problems.

This is the latest research to shine a light on the problem of late and non-payment of invoices. The most recent Lloyd’s Business in Britain report claims that SMEs are owed nearly £600 billion in outstanding invoices. Data from the Asset Based Finance Association show that this unpaid invoice debt has risen by almost 40% since 2011.

There are challenges for start-ups too. According to new figures from Crowdfinders, 50% of those questioned as part of its research said that they would either use personal savings or seek financial support from family and friends to set up a business. Only 28% said that they would turn to banks and institutions for start-up funding. The need to raise awareness of all the finance services available to small businesses has never been more apparent.

It is clear just how important non-bank finance is to SMEs. With traditional lenders continuing to be cautious with regard to small business lending, alternative finance services are becoming increasingly popular and this popularity is set to grow in the short term as small businesses feel the pressure of Brexit-borne market uncertainty.

According to new data from Dun & Bradstreet, over half of senior financial decision makers believe that Brexit will be financially damaging to their businesses. As small business owners prepare themselves for some market turbulence, the flexibility, accessibility and affordability that the likes of invoice finance, asset finance and peer-to-peer lending offer will be indispensable as they strive to maintain forward momentum.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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