Small businesses in the UK are owed £35.5bn in debt, according to a new survey.
Research, conducted by Mamut, shows that a third of small firms are owed 10% of their turnover by debtors.
Smaller companies appear to fare far worse when it comes to chasing debt, as over half of businesses with less than 20 staff receive late payments, compared to only 29% of firms with between 20-50 employees.
“This makes small companies particularly vulnerable,” said Alan Moody, managing director of Mamut.
“It is companies with less than 20 employees that form the majority of the 750 businesses going bust in the UK daily.
“Often this will be down to the fact that these companies have no formal system in place to track and chase late payers.
“Small companies don’t have the resources of larger suppliers to withstand cash flow problems,” Moody continued.
Manufacturing firms fared the worst for dealing with debt and late payments, with almost one in five small manufacturing firms having 50-75% of late paying debtors making up their customer base.
In comparison only one in 20 small and medium sized businesses in the financial services sector had the same proportion of debtors, and one in 50 in the retail, distribution or transport sectors.
© Crimson Business Ltd. 2006