The Federation of Small Businesses (FSB) has found that the UK’s late payment crisis has worsened during the coronavirus (COVID-19) lockdown.
62% of small businesses have been subject to late or frozen payments during the COVID-19 pandemic, according to research carried out by the FSB. Just 10% of small firms have agreed changes to payment terms with their clients. In addition, 65% of small businesses that supply goods or services to other businesses have experienced being paid late or having payments frozen.
The FSB has called on policymakers to give the Small Business Commissioner additional powers to investigate and fine repeat late payment offenders.
Mike Cherry, National Chairman of the FSB, said:
‘Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of late payments.
‘Cash is still very much king for small firms, and withholding it has pushed many to the brink at a time when they’re at their most vulnerable. Our endemic culture of treating small businesses as free credit lines against their will must be brought to an end.’