Construction News

Sun February 28 2021

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Survey suggests average builder is half a million in debt

22 Jul 14 The average small and medium sized construction company carried trade debt of £484,000 last year, according to a new survey.

Companies with 10-49 employees and a turnover between £2m - £10m were the worst hit, with an average debt of £627,000 – representing 16% of turnover.

Debt recovery firm Debt Guard Solicitors analysed the accounts of 550 construction SMEs.

Firms with fewer than 10 employees and a turnover of less than £2m each had an average trade debt of £41,000, accounting for a slightly smaller 14% of turnover.

 Medium-sized companies with between 50 and 249 employees and a turnover between £10m and £100m, as expected, had the highest levels of SME trade debt at £969,000. This accounted for a more manageable 13% of turnover.

Debt Guard Solicitors chief operating officer Mark Burgess said: “This research highlights the financial headache caused by outstanding and unpaid bills in the construction sector. It is clear that smaller SMEs in particular need much greater support in this respect, as many are facing the very real threat of closure due to trade debt pressure.

“Our message to all construction SMEs struggling with late payment is, ‘don’t write off your debt’, look at legal ways to professionally recover it as, by improving credit flow, this will help put your business on a more stable financial footing.”

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