The index also highlighted how 24% were also facing delays in investments and 22% were missing out on growth opportunities, while 21% felt they were losing a competitive advantage through being unable to fund strategic business decisions, such as making new hires.

Despite these issues the index also showed outstanding payments for SMEs were down by an average of 55% to an average of £68,715 from £152,606 in early 2023.

However, despite this decline almost half (47%) felt the amount they had owed had actually increased — Aldermore said this is potentially due to the cost of living crisis making business leaders concerned about cashflow.

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Aldermore said SMEs were likely to wait 34 days for a late payment to be paid, down from 55 days last year, and spend nine hours of company time chasing outstanding payments, a decline from 14 hours.

Ross McFarlane, commercial director of invoice finance at Aldermore commented on the issue of late payments: “While it’s positive to see late payments declining, there still needs to be a culture shift within the UK to reach a place where late payments are no longer the norm.

“It’s encouraging to see the government announce recent measures to tackle late payments through the Prompt Payment and Cash Flow Review  and we hope this will mean late payments continue to decline, particularly at this critical time for the UK economy.

“Being paid promptly means SMEs do not need to spend valuable time chasing payments and instead can focus on investing in and growing their businesses, which we know is especially important when balance sheets are being tested.”