THREE quarters of UK builders are under threat from 'cowboy clients' according to new industry research.
New analysis from the Federation of Master Builders (FMB) highlights the impact of 'cowboy clients' - customers who delay or withhold payment without good reason or make completely unreasonable demands.
Nearly 75 per cent of SME construction firms have described this as a serious problem for their business, with nearly a quarter reporting waiting more than four months or payment from a client or large contractor. Less than a third of respondents said they are always paid within the standard 30 days.
According to the research the late payments are having a negative effect on UK construction companies, with 30 per cent of those surveyed stating they had to delay payment to suppliers as a consequence, while one in five said it stopped them from having the confidence to grow their business. A total of 16 per cent of those surveyed said they had to borrow additional funds from a bank or other lender due to late payments, while 8 per cent almost went of business.
Director of external affairs at FMB, Sarah McMonagle said late payment is having a direct impact on the ability of construction SMEs to grow and prosper.
"As we edge towards Brexit, we need the construction sector to be firing on all cylinders to shore up the wider economy. The last thing we want to see is thousands of builders going to the wall because of their customers refusing to pay on time. We strongly recommend that builders and clients do everything they can to protect themselves by using a written contract that includes an agreed payment schedule."
