Small businesses are facing further cash flow pressures, as large customers extend payment terms, says an industry finance body.
According to the Institute for Factors and Discounters, large companies have been extending the time between receiving goods or services and making payments to as much as 60 days, putting undue pressure on small businesses.
“Certain sectors at the big end of town are turning the screws on their suppliers… the cash flow pressure this has placed on some suppliers has paved the way for creditors to introduce early settlement discounts,’ chairman of the institute Brendan Green said in the statement.
According to Green, to relieve this pressure, small businesses could access credit borrowed against their debtor’s ledger to so they don’t have to agree to lower payments.
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