Nearly half of SMEs in Ireland and the UK believe the issue of late payments has worsened for them over the past year, causing difficulties with cash flow and trade and leading them to spend time chasing outstanding debts.

Research by Close Brothers Commercial Finance found that late payments are a problem for 43% of small businesses in the region, with 43% of them believing the issue to be more challenging than a year ago.

Late payments have either led to problems with managing cash flow (62%), significantly impacted businesses' ability to trade (34%) or required companies to spend time chasing debts (20%), and half of the 900 businesses surveyed (51%) said difficulty created by delayed invoices had not improved.

In Ireland, 35% of businesses surveyed that have been impacted reported they were owed between €21,000 and €40,000 while a quarter (26%) said they were owed more than €40,000.

In Britain and Northern Ireland, two-fifths of those impacted said they were owed between £21,000 and £40,000 and a third said they were owed more than £40,000 in late payments.

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Nearly half of those impacted estimated that they write off between 10% and 25% of their turnover every year as a result, and the most affected !0% said they write off more than a quarter of their revenue due to late payments.

"Securing funding remains a priority for many businesses, especially as there continues to be additional pressure on cash flow," Ciaran McAreavey, chief executive of Close Brother Commercial Finance Ireland, said.

"It’s important that companies of all sizes ensure they take out finance that is most suitable for them."

Close Brothers became an on-lender for the Future Growth Loan Scheme last year, with an allocation of €30m from the SBCI.

Under the FGLS arrangement, Close Brothers provides asset finance of between €25,000 and €3m, with an initial maximum loan interest rate of 4.5% per annum for loans under €250k, and 3.5% for loans over €250,000.

Loans are unsecured up to €500,000, and interest-only repayments may be available at the start of the loans, subject to credit approval.

The company has been active in Ireland for the past 12 years, and parent Close Brothers Group is listed on the FTSE250 with a loan book worth £8.7bn.

(Pic: Getty Images)