The total value of late payments has increased from the end of 2023, to £96,772, up 41% from £68,715.
On average, SMEs are likely to wait an extra 46 days for a late payment to be settled, an increase from 34 days last year, and spend 13 hours of company time chasing outstanding amounts, up from nine hours.
Over a third (38%) of businesses reported having difficulties paying essential business costs while 36% said they were struggling to pay their own suppliers on time as a result of cash flow issues, representing an increase from 2023.
As a result, nearly a third of SMEs (31%) faced delays in making key investments according to Aldermore’s research, with 30% missing out on opportunities for growth.
Meanwhile, almost a quarter (24%) said they felt they were losing their competitive advantage, as they were unable to fund strategic business decisions, such as hiring new talent.
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Ross McFarlane, commercial director of invoice finance at Aldermore, commented: “With late payments continuing to be a problem for SMEs, it’s a reminder that a culture shift is needed in the UK where late payments are no longer acceptable.
“With a new Labour government in place, we hope the measures the government previously announced to tackle late payments can be implemented to help SMEs.
“If SMEs are paid promptly, it removes the time they currently need to spend chasing payments and instead they can use this time to focus on investing and growing their businesses.
“It also releases much needed cashflow from unpaid invoices which is particularly important given the current high-interest rate environment.
“At Aldermore, we offer SMEs flexible finance solutions such as invoice finance to help a business quickly release cash allowing them to access the money they need to run and grow their company.”
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