UK SMEs owed an annual average of nearly £150,000 – almost double compared to 2019

Britain’s SMEs are owed on average £147,141 in late payments – nearly £74,000 more than in 2019.

That’s according to the report ‘UK SMEs: Navigating Uncertainty’, from Dun & Bradstreet, the leading global provider of business decisioning data and analytics.

Following the fallout from COVID-19 and Brexit, plus late payments and rising inflation, it comes as no surprise that 61% of SMEs are struggling to pay back loans, according to the study. So much so, 69% of all SMEs surveyed have applied for extra funding in the past two years, compared to just 48% in 2018 and 2019.

With some business owners struggling to access financial support, many are taking matters into their own hands. 30% of SME retail bosses surveyed said they have accessed a mortgage to help fund their company in the last 24 months, in comparison to 17% of SMEs overall.

What’s more, 38% of SMEs are also requesting more data surrounding open banking to help futureproof their business – with 55% of all SME owners surveyed believing more accurate data will have a positive impact moving forward, reducing financial risk and addressing supply chain concerns.

However, despite the enormous strain placed on SMEs within the UK, the country’s small- and medium-sized firms continue to showcase great resilience and resourcefulness while remaining optimistic about the year ahead in spite of potential economic pressures.

Nearly three quarters of SME owners think they will be profitable this year, and 66% feel confident in their job security. Furthermore, a quarter of all small firms said that COVID-19 has aided growth over the past year, likely due to the spike in digital transformation, as SMEs embraced new ways of working.

In fact, digital-first appears to be the norm for many SMEs, as 34% are investing in automation systems to carry out procedures – freeing-up all-important time for the workforce. And even the skills gap and “great resignation” appear to be smaller issues for small- to medium-sized workforces altogether, with only 26% reporting problems with access to talent.

David Marshall – Senior Director, Finance Solutions, at Dun & Bradstreet, said: “There are over five million SMEs in our country and change is something every one of them has had to face. The crippling impact of late payments was an immense burden on businesses – even before the turbulence of the last few years – and as our research shows, it’s only getting worse. Yet there is light at the end of the tunnel; despite the widely acknowledged risk of recession in the UK, SME owners are feeling upbeat about the future. Hard work and entrepreneurial spirit are of course vital, but they alone aren’t enough.

“It’s now about working smarter, faster and taking advantage of the tools and intelligence at their disposal to move closer to customers, drive efficiency and unlock new revenue streams. Businesses that use data in this way will be more competitive and able to adapt to future challenges.”