The problem of late or slow payments continues to cause cashflow difficulties for businesses in the East Midlands, and more than a third expect it will only get worse in the next six months, according to the latest in the Business in Britain series of reports from Lloyds Bank.
While the fact that overall business confidence in the region remains strong (at 46 per cent) and may lead many businesses to consider investing in growth, those plans may be hampered by the fact that almost one in five (18 per cent) businesses admit to experiencing cashflow problems.
Late payment is cited by more than half (54 per cent) of those businesses as being a major cause.
The twice-yearly report, which is now in its 23rd year, canvasses the opinions of 1,500 UK companies, predominantly small and medium-sized businesses, and shows that 34 per cent in the East Midlands expect the proportion of customers requiring deferred payment terms to increase in the next six months, up from 23 per cent six months ago.
Just nine per cent of businesses expect that proportion to fall during the second half of 2015.
Donald Kerr, managing director at Lloyds Bank Global Transaction Banking, said: “While the number of businesses in the East Midlands suffering cashflow problems has fallen from a peak of 35 per cent in 2013, it remains stubbornly high.
“Cashflow is the lifeblood of any business but for too many businesses, late payments continue to be a significant problem. Where businesses do expect cashflow to be an issue, they need to take action to manage issues like late payment so that it doesn’t hamper their opportunities to grow.
After late payment, other major causes of cashflow difficulties include default by customers (31 per cent) and fall in demand for products and services, as cited by 27 per cent.