Almost two-thirds of small businesses in the UK experienced late or frozen payments as a result of the COVID-19 outbreak, a report has claimed.
The Federation of Small Businesses (FSB) polled 4,228 small business owners during lockdown in April 2020 and found the issue affected 62% of firms.
Businesses in the wholesale sector (72%) were worst affected, followed by those in legal and accounting, and advertising and marketing (both 62%).
Most firms in these sectors saw cashflow dry up as the UK went into lockdown throughout April 2020.
A raft of late payment reforms were announced in June 2019 by the previous government, although an eagerly-anticipated report has yet to be published.
Mike Cherry, chairman at the FSB, said:
“Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of this culture of late payments.
“Some corporations are now trying to inoculate themselves from the impacts of COVID-19 by withholding payments, or even freezing them.
“Withholding cash has pushed many [small firms] to the brink at a time when they’re at their most vulnerable.”
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