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Delinquent payments by small business owners are increasing in frequency, new data from Dun & Bradstreet has found.
According to the credit reporting agency, the average payment times for small businesses has blown out from 2.1 days in the September quarter to 53.9 days in the December quarter.
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“A lot of SMEs are just hanging on and properties have money against their personal homes to keep going,” Ferrier Hodgson partner Morgan Kelly told The Australian Financial Review.
“Interest rate costs in some cases are problematic, and a lot of SMEs are in an area of great uncertainty – and there is a focus on reducing debt in times of uncertainty.”
Mr Kelly said he would expect payment times to blow out even further in the coming months as liquidity and access to cash became more of a problem for SMEs.
He also said SMEs would extend payment terms as far as they could to make cash stretch further.
