Property developers' 'late payment of sub-contractors disrupts their growth'
Property developers are taking longer than ever to pay sub-contractors which is "severely disrupting" their plans for growth, according to a new report.
The average time it takes the country's top 10 biggest developers to pay sub-contractors is 61 days, it was found, despite their own invoices being settled in half that time.
The time lag is getting longer, the study by finance firm Funding Options revealed.
Conrad Ford, chief executive of Funding Options, said: "Increasing numbers of small construction firms are contacting us for a solution to plug the holes in their balance sheets, caused by developers' late payments."
"It is clear that developers are failing to pay their sub-contractors within a reasonable period of time, safe in the knowledge that sub-contractors would be reluctant to voice their concerns for fear of losing out on future business.
"They hide behind the fact that they 'agree' payment terms with sub-contractors, when the only alternative to accepting slow payment is simply losing the work."
"Sub-contractors are increasingly frustrated by late payments by developers largely due to the fact that they are unable to invest in their own growth as a result."