If it feels like it's taking longer to get paid at the moment, you're not imagining it.
Tight cash flow and ongoing supply chain pressure are squeezing businesses across the UK. And when one business pays late, it doesn't stop there. It ripples down the supply chain, and the smaller businesses at the end of it feel it the most.
The numbers are stark. According to research from the Department for Business and Trade and the Office of the Small Business Commissioner:
- Late payments cost the UK economy an estimated £11 billion a year
- Around 38 UK businesses close every day because of late payments
- More than a quarter of businesses deal with late payment every year
- Chasing overdue invoices eats up an estimated 133 million staff hours a year
At the same time, insolvencies remain high. There were 1,931 registered company insolvencies in England and Wales in July 2026. That's 5% up on June, and while it's slightly lower than a year ago, insolvency numbers have been at levels last seen during the 2008/09 recession ever since the second half of 2022.
Construction has seen more insolvencies than any other sector. In the 12 months to July 2026, it recorded 3,841 insolvencies, 17% of all cases where the industry was known. If you supply the construction sector, the risk of a customer not paying you isn't theoretical.
One question worth asking
How long, on average, does it take you to get paid? It's one of the simplest ways to tell whether things are drifting. If that number is creeping up, your customers are effectively using your money to fund their business.
Where trade credit insurance comes in
Trade credit insurance protects you if a customer doesn't pay. But it does more than that. It gives you a clearer view of who you're trading with before you extend credit, and it brings more structure to how you manage what you're owed.
We see the difference this makes. When we set up a new policy, we ask businesses to work out how long it's taking them to get paid, then check again three to six months later. Many see a real improvement.
What this looks like in practice
We recently worked with an established builders' merchant supplying everyone from small local builders to larger contractors. Slow payers had been a problem for a while, and their processes weren't as strong as they needed to be.
With growth on the horizon, a trade credit policy became part of getting those foundations right, giving them protection against bad debt and more confidence to grow. We've also been able to support them on their wider commercial insurance as they expand.
Worth a conversation?
If your customers are taking longer to pay, or you're planning to grow and want to do it without taking on more risk, our trade credit team can help. Get in touch with Lauren Williams on 07823 561 126 or email LWilliams@specialistrisk.com
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