SMALL firms are waiting longer than ever for invoices to be paid despite the improving state of the economy, according to a new study.
Businesses with turnover of less than £1 million wait an average of 72 days for their money, 11 days longer than at the peak of the recession, said the Asset Based Finance Association (ABFA).
In contrast, companies with £500m-plus turnovers have seen payment waits fall by a day since last year to 47 days.
Jeff Longhurst, chief executive of the ABFA, said: "Despite the economic recovery gathering pace, payment delays are getting worse, not better, for small businesses.
"It's very worrying to see that the trend is going in the wrong direction for smaller businesses, in spite of what is a more benign business climate than we have seen for several years. The benefits of the recovery are not being felt equally.
"Delays to payments put enormous pressure on small businesses' cash flow - they have to meet overheads, tax bills and their own supplier invoices whether they've been paid or not. Smaller businesses are particularly vulnerable.
"No matter how successful they are, if just a few invoices aren't paid on time, they could end up in serious financial trouble."
