Small and medium enterprises (SMEs) are facing serious cash flow problems because of the rising numbers of late payments from their biggest customers, and banks cutting back on lending because of the credit crunch.

According to research being carried out by the Forum of Private Business (FPB), 82.4 per cent of its members believe late payments are going up and nearly 70 per cent believe this is costing them between £1,000 and £25,000.