Difficulties securing credit have triggered a change in SME’s insurance buying habits as a result
SMEs are suffering as the financial pressure of requesting payments have risen over the past 12 months, according to new research published by Premium Credit today (31 May 2022).
According to the report, nearly one in four (24%) SME owners and managers said delays in payment of invoices have got worse in the past year, with 5% saying it has become much worse.
Only 3% of SMEs, meanwhile, said issues with late payment have improved in the past year, with over half (55%) reporting there had been no change.
Consumer Intelligence conducted the independent research on behalf of the insurance premium finance provider, surveying 745 SME owners and managers between March 11 and 16 2022.
Premium Credit chief sales officer Owen Thomas said: “It is worrying to see that late payment of invoices has become a bigger issue for SMEs over the past year as it has a major impact on cashflow and a knock-on effect throughout business operations.”
‘Critical’ for business
The findings further revealed that 13% of SMEs have found it harder to secure credit since the Covid-19 pandemic started.
As a result, this difficulty has prompted a switch in how some firms pay for insurance – around 12% of SMEs now pay for insurance monthly rather than in one lump sum.
Thomas added: “Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow by spreading payments.
“Our research shows nearly six out of ten SMEs use some form of credit to ensure they can still afford business-critical insurance.”
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