Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Two-thirds of SMEs not paid within 30 days, FMB finds

Nearly a quarter of construction SMEs have had to wait more than four months for payment from clients or large contractors, according to new research from the Federation of Master Builders (FMB).

The UK-wide study into “cowboy clients” found fewer than a third are paid within the standard 30 days, with 30 per cent saying delays meant they had to delay payments to suppliers.

The survey claimed payment problems had also stymied economic growth, with a fifth of respondents stating that late payment had stopped them from having the confidence to grow their business.

The FMB found that 16 per cent of firms had to borrow to continue operations, while 8 per cent had almost gone out of business due to late payment.

Last week cladding specialist Lakesmere Group fell into administration with the loss of 109 jobs. CN understands that late payment was one of the contributing factors in the firm’s downfall.

The building envelope specialist worked for a number of the UK’s biggest projects including Crossrail and the Olympic Stadium.

FMB director of external affairs Sarah McMonagle said: “The worst type of cowboy client seeks to delay or withhold payment on spurious grounds, for instance by discovering make-believe faults.

“Nearly a quarter of construction SMEs have had to wait for more than four months for payment from a client or large contractor.

“Fewer than one third of builders are always paid within the standard period of 30 days and this is completely unacceptable.”

The FMB study follows on from a report by the Electrical Contractor’s Association (ECA) in August which found that nearly two in three SMEs had not been paid within 30 day terms by public sector clients, despite legislation compelling public bodies to do so.

According to government legislation – Regulation 113 of the Public Contracts Regulations 2015 – public sector clients must pay valid and undisputed invoices submitted by contractors within 30 days. 

Readers' comments (1)

  • This is NOT news to ANY SME

    Nor is it news to ANY client - SOME, and we are grateful to those few, DO honor payment terms, but they are the exception to the rule!

    It's the worst kept secret in the industry. Thank you Construction News for shining a light on it, but please don't sell it as 'News'!

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.