Further to SFA survey findings
The latest findings from the Close Brothers Business Barometer support the Small Firms Association’s recent statement that slow payments are causing serious problems for SMEs.
The survey shows that 59 per cent of SME owner managers across Ireland believe late payments are seriously damaging to their cash flow.
Of these, a staggering 73 per cent say that payments are regularly more than 30 days late.
Paul Stephens, Head of Sales at Close Brothers Commercial Finance said: “Our findings are very much in line with those of the Small Firms Association. What’s happening is that small businesses aren’t being paid on time, they in turn can’t pay their suppliers and so it goes on in a domino effect. It’s effectively threatening to cripple the SME sector.
“I’m glad to see the SFA’s call for measures such as the establishment of a Voluntary Prompt Payment code to combat the late payment epidemic, but am also keen to stress that there are ways for small and medium sized businesses to protect themselves now.
“An easy way to free up working capital and improve cash flow is the implementation of an invoice finance facility. Our research shows that many firms are still unsure of how this works. Put simply, it’s a flexible method of funding that can work alongside bank lending. It doesn’t have to be one or the other.
“The instant you raise a customer invoice, we deposit up to 85 per cent of its value into your account. So you get the money up front, rather than waiting 30, 60 or even 90 days for payment, thus alleviating the myriad of problems that late payments bring.
“We have lent approximately €200 million through invoice and asset finance to Irish businesses over the past 18 months. Our message is that if you have a viable sales ledger, a robust invoice finance facility could negate the impact that issues such as late payments can have on the day-to running of your business,” he added.