Late payments crisis deepens during lockdown
Almost two-thirds of small businesses in the UK experienced late or frozen payments as a result of the COVID-19 outbreak, a report has claimed.
The Federation of Small Businesses (FSB) polled 4,228 small business owners in April 2020 and found the issue affected 62% of firms.
Businesses in the wholesale sector (72%) were worse affected, followed by those in legal and accounting, and advertising and marketing (both 62%).
Most firms in these sectors saw cashflow dry up as the UK went into lockdown throughout April 2020.
A raft of late payment reforms were announced in June 2019 by the previous government, although a report has yet to be published.
Mike Cherry, chairman at the FSB, said:
"Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of late payments.
"Some corporations are trying to inoculate themselves from the impacts of COVID-19 by withholding payments, or even freezing them.
"Withholding cash has pushed many [small firms] to the brink at a time when they're at their most vulnerable."
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