Online business finance supermarket, Funding Options, said that suppliers are now having to wait (on average) over 42 days for invoices to be paid, up from over 40 days on average five years ago in 2013/14.
With many smaller suppliers to Carillion agreeing to a 120-day term for payments, Funding Options said the company's collapse has left many businesses receiving almost none of the money they were owed, with some estimating they'll receive at most a penny in the pound.
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Conrad Ford, Chief Executive Officer of Funding Options, said many businesses have high overheads and labour costs, with many unable to afford waiting for payment for lengthy periods of time.
"A single late payment can be an issue even for larger and more successful firms, and worsening delays could create more insolvencies.
"Carillion's collapse sent shockwaves through the industry, affecting smaller suppliers who will now never get paid what they are owed.
"It is crucial that construction companies understand all the options available to them for the funding they require to minimise the impact of late payments," he said.
In June, a new bill was introduced in Parliament (Aldous Bill) which aims to address late payments for SMEs through introduction of a deposit scheme.
Mr Ford added: "There is a variety of alternative lending available to small businesses seeking funding, such as invoice finance, asset finance, crowdfunding and peer-to-peer lending. This abundance of choice can mean it can be difficult to know which sort of finance is the best fit for a particular need, or who is out there to provide it."
(LM/MH)
