Big property developers are putting smaller construction firms at risk of insolvency because of delayed payments, a report has revealed.
The report, conducted by online finance firm Funding Options, found that, on average, sub-contractors are paid 56 days after work is complete by the biggest property developers.
This is two days more than last year, and eight days more than in 2014, the report says.
It says the gaps in cash flow put smaller firms at risk of insolvency if they are not paid within a reasonable amount of time.
Conrad Ford, chief executive of Funding Options, said: “Major developers feel they have a lot to gain from delaying payments, knowing that their sub-contractors would be hesitant to raise their issues for fear of losing out on future work. There seems to be only two choices for the suppliers: accept these slow payments or lose the business going forward.”
Earlier this year, manufacturers’ body, Engineering Employers Federation (EEF), called on the Government to support firms by investing in infrastructure, higher skills, and by lowering the cost of doing business.
They said they needed support or firm’s growth plans could “fall by the wayside”.
Terry Scuoler, chief executive of the EEF, said: “We must strive for better productivity, increased trade and more ambitious investment in new technologies.
“Government can underpin this by supporting higher skills, investing in infrastructure, lowering the cost of doing business and providing world class support for growing businesses.”