More than one in eight are finding it harder to get credit
New research1 from the UK’s leading premium finance company, Premium Credit, shows SMEs are suffering as late payment of their invoices has become a bigger issue in the past 12 months.
Nearly one in four (24%) SME owners and managers say delays in payment of invoices have got worse in the past year with 5% saying it has become much worse. Just 3% of SMEs say issues with late payment have improved in the past year while 55% say there has been no change.
The late payment issue is becoming more of a problem as Premium Credit’s Insurance Index, which monitors insurance buying and how it is financed, shows more than one in eight (13%) of SMEs have found it harder to secure credit since the COVID-19 pandemic started.
That has prompted a switch in how some firms pay for insurance – around 12% say they now pay for all insurance monthly rather than in one lump sum as they did previously.
Owen Thomas, Chief Sales Officer at Premium Credit, said: “It is worrying to see that late payment of invoices has become a bigger issue for SMEs over the past year as it has a major impact on cashflow and a knock-on effect throughout business operations.”
“Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow by spreading payments. Our research shows nearly six out of ten SMEs use some form of credit to ensure they can still afford business-critical insurance.”
Premium finance companies like Premium Credit provide businesses and consumers with the ability to use a loan to pay for their insurance in monthly instalments. By managing insurance payments in this way, businesses and consumers can spread the cost of their insurance, rather than pay their premiums in one lump sum.
