The first annual European Business Survey of small and medium-sized companies, published yesterday, found that the average gap between invoice and payment is 90 days in Italy and more than 70 in Spain and Portugal. The UK average is 50, compared with 65 in the EC as a whole.
Nearly two-thirds of the 5,000 companies said they had longer payment periods than a year ago. Of the 75 per cent that were seeking to recover debts, a third had resorted to legal action, according to the research by Grant Thornton, the accountancy firm, and Business Strategies, the economic consultants.
Patrick Brooke of Grant Thornton said: 'Smaller businesses' ability to trade is being shackled by pressures on finance and vulnerability to late payers.'
The survey also found that companies still expect to cut jobs in the months ahead, with few believing that profits will rise. In the Community as a whole a quarter of companies expect to raise turnover this year and nearly a fifth plan to lift exports.
In addition, less than a quarter of small and medium-sized companies in the UK and Belgium say they will spend more on training in the next 12 months - showing what Mr Brooke calls 'a worrying concentration on the short term'.
The report also found that nearly half of the companies surveyed plan to expand into new markets, mainly within the EC, while a third intend to diversify.