It’s an issue that just won’t go away. Late payment costs SMEs thousands: new data from Close Brothers Business Barometer puts the average outstanding payment at £20,000. Invoice finance can help combat this problem.

Late payment is a threat to cashflow, that’s why combating it is so important. There have been plenty of initiatives in recent years that that have attempted to do so – small business advisor Karren Brady has pledged to tackle the issue and the Prompt Payment Code initiative has been promoted – however, as yet, the problem remains. Invoice finance is an answer that is staring small businesses in the face.

New data from the Asset Based Finance Association underline the challenge that SMEs continue to face. According to the association, when small businesses are working on subcontracted profits for local authorities, they are often hit by a double delay when waiting for payment because they have to wait for the council and then the main contractor to pass on the funds. The ABFA claims that, on average, SMEs with an annual turnover of less than £1 million have to wait 71 days to receive payment.

Invoice finance, alongside the likes of peer-to-peer lending and crowdfunding, is part of the non-bank finance revolution that has changed the look of the small business finance landscape, and has the power to protect SMEs from the threat attached to late payment. By ensuring invoices are paid promptly without affecting business relationships, invoice finance can be used to help maintain cashflow and nurture business growth.

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