Payment delays threaten construction contractors
A report from online finance firm Funding Options reveals that smaller construction firms are suffering "severe" cash-flow problems because of delays in being paid by property developers.
The research shows that developers are taking 56 days on average to pay subcontractors, two days longer than a year ago. This, the report warns, is hitting growth prospects for subcontractors and is increasing the chances of them going bankrupt.
Conrad Ford, chief executive of Funding Options, said: “Major developers feel they have a lot to gain from delaying payments, knowing that their subcontractors 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.”