A worrying new study highlights the extent to which late payments are negatively affecting small and medium-sized enterprises (SMEs) and their owners.
According to new research, 18 per cent of UK small businesses are currently on the brink of bankruptcy or liquidation as a direct result of late payments, while a further 42 per cent have been forced to take out a substantial bank loan in order to cover one or more outstanding payment.
Worse still, the study, which was commissioned by payment rating website The Prompt Payment Directory, suggests that almost a third of SME owners or decision makers believe that their ongoing struggles with late payments have had a negative impact on their personal mental health.
29 per cent of business owners quizzed said that they had suffered from depression, anxiety, stress or other serious mental health issues as a direct result of their battles with late payments.
A further 36 per cent of SME owners said that they had been forced to sacrifice their own salary in order to keep their business afloat, while 21 per cent added that they had been forced to sell their home.
In recent weeks, a separate report published by the Federation of Small Businesses (FSB) revealed that the UK’s worsening ‘late payment culture’ is costing the UK economy approximately £2.5bn every single year – and forcing as many as 50,000 SMEs out of business.
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