Trade debt woes hurting SMEs, says research

NORTH West small and medium-sized companies are carrying up to £1.5m of trade debt, research has suggested.

The smallest companies, with 1-9 staff and a turnover of less than £2m were proportionately the hardest hit, with around  £46,000 worth of trade debt.

The findings, by Manchester online commercial debt recovery law firm Debt Guard Solicitors, were based on official account details submitted to Companies House by 819 North West SMEs.

The research identifies firms in Liverpool and Blackburn as carrrying higher than average amounts of trade debt, with £2.1m and £1.9m) respectively.

The overall indebtedness of the region’s SME market reached a staggering £721bn  in 2013/14, with late payment a major contributory factor.

Mark Burgess, chief operating officer at Debt Guard Solicitors, said: “This research highlights the financial headache caused by outstanding and unpaid bills.

“It is clear that the North West smaller SMEs in particular need much greater support in this respect, as many are facing the very real threat of closure due to trade debt pressure and late payment.”

The average time it took to receive payment from customers, known as debtor days, was 28 days for micro-SMEs, 49 days for small companies and 39 days for medium-sized companies.

Debt Guard Solicitors is part of Ascent Performance Group, which is a subsidiary of law firm Irwin Mitchell.