One late payment from a large customer can cascade through your whole payment schedule. If a £40,000 invoice (illustrative, not a quote) was due on the 15th and arrives on the 28th instead, you may miss payroll, miss a supplier settlement date, or breach a payment term that triggers a penalty. The work was done; the money is simply delayed.
Why this is different from a structural cashflow problem
If you have a confirmed debt from a creditworthy customer — a purchase order, a signed delivery note, or a debt that the customer has acknowledged — the shortfall is temporary and quantifiable. That is the ideal situation for short-term business finance: there is a clear repayment event on the horizon, and the only question is how to bridge the days or weeks in between.
Using a Credicorp facility to bridge the gap
Your company can draw on a Credicorp facility to cover immediate commitments — wages, supplier payments, VAT — while the customer invoice works through their payment process. Once they pay, you repay the facility. The cost is typically a fraction of the commercial damage caused by missed obligations (illustrative reasoning, not a quote for your situation).
Steps to take in parallel
- Issue a formal late-payment notice and confirm the new payment date in writing.
- Check whether you are entitled to statutory interest under the Late Payment of Commercial Debts Act.
- Review your terms to shorten payment windows on future contracts with this customer.
- Consider credit insurance if this customer represents a significant share of revenue.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Late-paying customers and cashflow, Using finance to cover payroll during a cashflow gap.