Member Article

Late payment funding made available to struggling SMEs

SMEs in Yorkshire and the North East could secure funding from a £100m pot made available to tackle issues around late invoice payment.

Research carried out by Yorkshire Bank showed many small enterprises are struggling with an average seven-week wait for monthly invoice payments, which has even threatened some businesses’ survival.

Many firms are concerned about late payment, according to the bank’s findings, while one in ten believe they would have to close down or drastically restructure their business if a customer took 90 days to pay their invoices.

Late payment also happens to heavily impact those businesses who are worst affected by the economic downturn, including construction firms, and those with shorter credit periods like fuel providers.

This research has led to the launch of Yorkshire Bank’s £100m fund, which is part of a larger £1bn Business Expansion package.

Invoice finance secured from the bank will allow companies to access up to 85% of an invoice’s value as soon as it is issued to relieve pressure on unpaid bills.

Head of invoice finance at Yorkshire Bank, Martin Rothera, commented: “This £100m fund underlines our enduring commitment to the invoice finance market in the current tough business climate and will provide real support for many businesses which face difficulties through no fault of their own.

“Late payments can put immense pressure on small businesses as cash flow dries up, leading to pressure on their ability to pay their own bills.

“From our research, we know that cash flow and invoices being paid on time are still a primary concerns for SMEs.

“Cash flow is the lifeblood of a business and invoice finance is an extremely useful tool for SME owners. It’s something which more businesses could benefit from accessing.”

This was posted in Bdaily's Members' News section by Miranda Dobson .