Insights
Late-paying customers are quietly draining your cash flow
It takes 55 days for 95% of small business invoices to be paid, against agreed terms of 29 days. Here’s what that gap costs you, and how invoice finance closes it.
The government’s own Payment Times Reporting Scheme shows it takes large businesses 55 days to pay 95% of their small business invoices, against an average agreed payment term of 29 days. The most recent cycle improved by six days, and the gap is still close to double what was agreed. That’s the part that lands on the small business at the other end.
How much slower has payment become?
According to the Payment Times Reporting Regulator’s own analysis, the measure of how long it takes a large business to pay 95% of its small business invoices climbed to 64 days at its worst. The most recent figures, covering the six months to 31 December 2025, show it has since come back to 55 days, down from 62 days in the cycle before, an improvement of 6.3 days. The Regulator’s own assessment is blunt: this “disproportionately affects cash flow for small businesses,” since it’s the slowest payers dragging the average out further, not a broad, even shift.
The improvement is real, and it still leaves a gap you have to fund. Across all industries the average agreed term is 29 days, yet clearing 95% of small business invoices takes 55. In the Regulator’s own wording, it takes almost double the average agreed payment term for the vast majority of invoices to be paid. 31.5% still aren’t paid within terms at all. That structural difference, roughly 26 days at the tail, is what a business invoicing on 30-day terms has to carry.
This is current, government-measured data, not an estimate. To be straight about direction: the most recent cycle got better, not worse. What hasn’t shifted is the gap between the term you agreed and the day the money arrives.
Why does a six-day swing matter?
Six days either way doesn’t sound like much until it’s stacked across every invoice on your books at once. A business owed $100,000 across its outstanding invoices isn’t waiting on one payment. It’s waiting on dozens, and each one running a week longer than expected compounds into a real, ongoing cash flow gap rather than a one-off delay.
That gap is exactly what invoice finance exists to close, not by chasing the customer harder, but by not waiting on them at all.
How does invoice finance solve this?
Invoice finance releases cash tied up in unpaid customer invoices. Instead of you waiting 30, 60 or 90 days (or the 55 days it takes for 95% of invoices to clear) to get paid, a lender advances a large share of the invoice value upfront, using the invoice itself as security rather than property. With the better lenders on our panel, it’s connected to your accounting software once, and cash releases against new invoices without a pile of paperwork every time you draw.
Facilities on our panel run from $50,000 up to $100,000,000+ for the right business, sized to the volume of invoices going out the door.
We’re filming a segment with one of our invoice finance partners on how they assess a business’s debtor book and what makes an application move faster. Once it’s up, it’ll sit here.
When invoice finance isn’t the right answer
If late payment is occasional (one or two customers, a handful of times a year), the fee on an invoice finance facility probably costs more than the problem is worth. It earns its place when slow payment is a structural pattern across your customer base, not an occasional annoyance. It’s also not a fix for a customer who won’t pay at all. That’s a credit control problem and, if needed, a legal one, not a financing one.
Carrying a growing pile of unpaid invoices?
Tell us how your customers typically pay and we’ll tell you whether invoice finance closes the gap for your business.
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