Late payments are an issue for all sizes of companies, but a survey by the research consultancy BDRC Continental has revealed that medium-sized businesses are particularly affected.
According to the August 2017 study, 94% of medium-sized firms say that late payments have caused them cash flow problems. Medium businesses are defined as those with 50 or more employees.
All of the major political parties have said that they are committed to tackling the business debt issue. In April 2017, legislation was introduced to make it compulsory for large companies to report on the time it takes for them to make payments. The government may introduce further regulation in the future to deal with the problem.
A 2016 survey carried out by the Federation of Small Businesses found that 30% of all payments to its members are late. They claim that many businesses have failed because large companies pay small to medium companies late.
Large businesses can cope with a level of business debt, but smaller companies may not have the cash reserves available to keep going until the money they are owed has been received. One solution to be able to continue to pay salaries and expenses when cash flow is short is bridging finance.
A short-term bridging loan can be used to survive a temporary low cash flow situation, then repaid after money owed has been collected. A bridging finance broker can help companies find the best bridging loan for their individual needs and quickly have the funds available.
