The headline figure the report places on the problem is stark: late payments are estimated to contribute to approximately 14,000 business closures annually, equivalent to 38 companies ceasing operations every day. The aggregate cost to the broader UK economy is put at almost £11 billion per year.

Perhaps the most telling finding is not the scale of overdue debt but the reluctance to recover it. One in three small businesses does not formally pursue late payments, the analysis found, citing a desire to protect customer relationships. That dynamic is well understood in trade credit markets but rarely quantified at this level: the fear of losing a client routinely outweighs the financial damage of carrying unpaid invoices, at least until the cash position deteriorates sharply.

Ben Larkins, co-founder of Century Business Finance, said: “Late payments aren’t just frustrating, they can prevent otherwise healthy businesses from paying staff, covering day-to-day costs or investing in future growth. Allowing unpaid invoices to build up often creates much bigger financial pressures in the long run.”

Century also published a regional breakdown using late-payment incidence rates from the Q1 2026 Business Health Report published by insolvency trade body R3, scaled against SME population data. The West Midlands recorded the highest rate at 2,625 late payments per 100 SMEs, followed by Scotland at 2,135 and Yorkshire and Humber at 1,373. Greater London, often assumed to carry the heaviest commercial stress, ranked sixth at 1,138 per 100 SMEs. Northern Ireland recorded the lowest rate at 431.

The late-payments problem sits against a backdrop of intermittent government attempts to tighten the regime.

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