Revealed: Average North West SME now owed more than £100k

The North West’s small- and medium-sized enterprises (SMEs) are owed an average of £101,170 in outstanding invoices, new data has revealed.

Lloyds Bank Commercial Banking’s latest Business in Britain report found that the amount owed to the region’s firms rose 6% since January 2016.

Of the SMEs surveyed, around 26% are currently owed over £200k in outstanding invoices, up from 25% at the beginning of the year.

Around one in three businesses (33%) in the North West cited late payments as the number one cause of their cashflow problems. That issue is expected to persist, with 34% forecasting more customers to require deferred payment terms during the next six months.

Lloyds’ research also found that the region’s companies owned an average of £450,027 in assets outright, which is up 8% since January.

Additionally, North West SMEs expect to invest an average of around £374k in their businesses in the next six months. In January that figure stood at just over £314k, which suggests that companies remain largely undeterred by the economic shocks of recent months.

But SMEs’ investment plans might be held back by a relatively poor awareness of the different lending options available.

According to Lloyds’ findings, just 48% of the region’s SMEs said they aware of invoice finance. Even fewer (38%) were aware of asset based lending.

Lloyds Bank Commercial Finance’s area director, Richard Evans, said: “If businesses are issuing more invoices and investing in more assets, then this is very positive for them and the economy.

“But if companies are having to wait longer to be paid, and are reporting that they expect to face an even longer wait in the future, this slowing of payments could be holding businesses back from releasing critical cash to drive future growth.”

He continued: “The amount of money that firms have tied up in unpaid bills and other assets is significant, and this report suggests that these sums could be unlocked if businesses were more aware of the funding options that are open to them.”

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