Why Late Payments Continue to Hurt SMEs

Late payments remain a persistent challenge for small and medium-sized enterprises (SMEs) in the UK. The GoCardless and Federation of Small Businesses (FSB) Late Payments Report 2025, based on a survey of over 2,000 small business owners, says 45% of SMEs are dealing with more late payments than they did a year ago. Half of them are worried this problem’s only going to get worse over the next 12 months.

Nearly a quarter (24%) of SMEs are waiting up to 60 days for invoices to be paid, which is a big deal when small businesses made up 60% of UK jobs and 48% of business turnover in 2024. That’s a lot of pressure on top of an already tough economy. Plus, 52% of these businesses just give up on chasing late payments up to 10 times a year because it’s too much hassle.

The report also shows that 28% of SMEs have had to take out loans or credit lines to keep things ticking over. This can pile on extra costs with high interest rates, making it harder for small businesses to keep their heads above water. On top of that, a third of SMEs say late payments mess with their ability to pay suppliers on time, and 18% struggle to pay their staff, which is stressful for everyone involved.

But there’s a bright side—invoice financing can help sort this mess out. It’s a simple way for SMEs to get cash quickly by selling their unpaid invoices to a invoice financier, such as Regency. It’s a lifeline for keeping cash flowing without waiting ages for clients to pay up. Invoice financing also takes the stress out of chasing payments as we deal with collecting payments on your behalf, so you can focus on running your business.

It’s great for keeping things steady and even helps you grow—imagine a small manufacturer stocking up on raw materials without worrying about late payments holding them back.

The GoCardless and FSB report shows late payments are a growing headache, but invoice financing is a practical fix.  It’s a straightforward way to stay on top and keep growing, no matter how many clients drag their feet.

To discuss the funding options available to your business. Please do not hesitate to contact us on 0161 280 4220 or via the website here.