Overdue payments to small and medium-sized businesses in the UK increased by over 40% last year, taking the total that small companies are owed to over £25bn, according to research by Bacs Payment Schemes Limited.
The number of SMEs owed money across the UK increased from 51% in 2007 to 57% in 2008, and the national average of outstanding payments owed to small firms increased to £38,000 - up £8,000 from 2007.
Small businesses in the Midlands have been hit the hardest in the UK, with the average company in this region claiming overdue invoices amounting to just under £70,000.
"Late payment and bad debt are the scourge of business owners. Often, they are major factors behind businesses being forced to close," said Phil McCabe, spokesman for the Forum of Private Business.
"The amount of money owed to small firms has soared over the past year as big businesses seek to create credit lines for themselves by squeezing their suppliers. In addition, despite the Government's pledge to pay its suppliers within 10 days, public organisations continue to be among the worst culprits."
www.ukba.co.uk
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