According to a new study, the majority of European SMEs have been forced into taking out loans due to missing and delayed payments.

A survey by banking-as-a-service (BaaS) provider Vodeno of more than 2,000 SMBs found that 54% had to take out a loan due to missed payments, while 62% said unpredictable cash flow were the biggest challenge facing their business.

The study found that only a small minority of SMEs (10%) comfortably claimed that payments were reliably made on time.

Long transaction processing times – especially when transferring money internationally – have proven to be a significant cause of problems for small businesses.

More than half (52%) of respondents failed to meet their commitments due to late processing of payments.

“Long settlement times, transaction delays and lack of transparency in the payments space can cause headaches for businesses, especially SMBs, which typically have fewer reserves to draw on in the event of disruptions” , said Tom Bentley, CCO of Vodeno.

“Our research shows that these organizations rank missing payments among their biggest challenges, with many taking drastic measures to stay afloat.”

Bentley added: “In today’s macroeconomic climate, cash flow can be the difference between survival and insolvency, and unpredictable payment processing is the biggest disruption to business operations.”

Vodeno’s full report can be read here.

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