Six in ten small businesses (62%) have experienced late or frozen payments during the COVID-19 outbreak, according to a survey of 4,000 companies by the Federation of Small Businesses (FSB).
In its report, Late Again: how the coronavirus pandemic is impacting payment terms for small firms, the organisation points out that while six in ten firms have experienced late payment, only ten per cent have actually agreed to changes in payment terms.
FSB National Chairman Mike Cherry said: “Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of late payments. Sadly, some unscrupulous corporations are trying to inoculate themselves from the impacts of COVID-19 by withholding payments, or even freezing them, at the expense of small businesses. Our endemic culture of treating small businesses as free credit lines against their will must be brought to an end.”
The FSB makes five recommendations to tackle the issue of late payments:
* The Small Business Commissioner, Philip King, is appearing in a Working Capital Forum webinar on 14th July, discussing how to support smaller suppliers.
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