Late payment remains the biggest cause of cashflow problems for businesses in the East of England – and many firms expect things to get worse in the next six months.

According to the latest Business in Britaiin report from Lloyds Bank, nearly one-fifth of businesses in the East (17%) admit to experiencing cashflow problems of some sort.

As a result, Lloyds warns that, while the overall level of business confidence in the region remains steady, some firms intending to invest in growth may find their plans hampered.

Among firms acknowledging cashflow problems, late payment is cited by more than three-quarters of them (78%) as being a major cause.

The report adds that a third of firms in the East (33%) expect the proportion of customers requiring deferred payment terms to increase in the next six months, up from 23% in the last survey six months ago, while only 11% expect the proportion to fall during the second half of 2015.

After late payment, other major causes of cashflow difficulties include fall in demand for products and services, cited by 39%, and default by customers (22%).

Donald Kerr, managing director at Lloyds Bank Global Transaction Banking, which provides alternative sources of financing for customers including asset based lending and trade finance, said: “While the number of East of England businesses suffering cashflow problems has fallen from a peak of 35% in 2013, it remains stubbornly high.

“Cashflow is the lifeblood of any business but for too many businesses, late payments continue to be a significant problem. Where businesses do expect cashflow to be an issue, they need to take action to manage issues like late payment so that it doesn’t hamper their opportunities to grow.

“Specialist types of lending such as invoice finance can alleviate these pressures by allowing businesses to borrow against the value of their invoices helping them to avoid payment delays and improve cashflow.

“Thorough credit checks on customers and setting out clear payment terms at the outset of any relationship will also help.”

The Lloyds Bank Business in Britain report is now in its 23rd year.

The survey for the latest edition canvassed the opinions of 1,500 UK companies, 65% of them being firms with turnover of below £10million, 10% with turnover between £10m and £15m and 25% with turnover of above £15m.