65% of Irish SMEs say customer payments are taking longer than a year ago. This is according to new research from Bibby Financial Services, a leading provider of financial support and funding solutions to SMEs. The challenge of late payments continues to be a widespread issue for businesses, with many facing tighter margins as a result.
Sector-specific data also shows that manufacturing is particularly affected, followed by wholesale, transport, and construction. In contrast, fewer than one-third of SMEs in the services sector reported similar issues.
Among SMEs impacted by delayed payments, 42% say they lack the cashflow needed to grow, while 62% report insufficient liquidity for day-to-day operations. Insolvencies have also played a role, with 17% of SMEs experiencing the collapse of three to five customers in the past year, and 34% seeing one to two suppliers cease trading - up 4% from 2024.
Despite these challenges, SMEs remain resilient and optimistic. A remarkable 92% plan to invest in staff, technology, and growth in 2025, with an average investment value of €193,000. Priorities include staff training (35%), recruitment (34%), and digital transformation (33%), including AI.
Aoife McGinley, Head of Client Services at Bibby Financial Services Ireland, commented:
“Late payments continue to put a real strain on SMEs, squeezing margins and restricting cashflow at a time when costs are already high. However, it is positive that SMEs remain determined to invest in their people, technology and growth for the remainder of 2025. This optimism highlights the importance of supporting SMEs with the right financial solutions so they can thrive.
At Bibby Financial Services, we are committed to supporting these businesses with the funding solutions they need to overcome barriers, unlock working capital, and pursue ambitious growth plans in 2025 and beyond.”
To help SMEs navigate this challenging landscape, Bibby Financial Services has a number of practical tips on cashflow and cost management:
1. Prioritise Cashflow Management
Late payments and unexpected costs can derail business plans. SMEs are encouraged to set clear payment terms, offer incentives for early payments, and use forecasting tools to identify potential cashflow gaps. Funding solutions such as Invoice Finance can help bridge the gap between invoicing and payment, unlocking cash from unpaid invoices without adding debt.
2. Review and Reduce Costs
In a high-cost environment, understanding and controlling expenses is essential. Businesses should distinguish between operating costs and investment spend, reduce discretionary expenses, and renegotiate third-party contracts. Diversifying revenue streams and customer bases can also reduce exposure to financial risk and open up new opportunities.
3. Build a Financial Safety Net
Maintaining a three-to-six-month cash reserve can help businesses weather unforeseen disruptions, such as supply chain issues or client insolvencies, without compromising operations.
4. Focus on Customer Retention
Retaining existing customers is more cost-effective than acquiring new ones. SMEs should ensure their services meet client needs, reward loyalty, and maintain regular engagement through follow-ups, special offers, and digital communication.
With strategic planning and the right financial tools, SMEs can not only survive but thrive in 2025 and beyond.
About Bibby Financial Services Ireland
Bibby Financial Services is Ireland’s largest independent provider of financial funding solutions to Irish SMEs. Operating across the island of Ireland for more than 19 years, the company, on average, facilitates over €1m a week in new funding limits, in addition to the millions in weekly payments to existing clients, to enable a range of scenarios including cashflow funding, growth and expansion, management buy-ins and buy-outs, refinancing, mergers and acquisitions.
A people-led business, the Bibby Financial Services team offer support to businesses with a turnover from €750,000. Sectors serviced include Manufacturing, Wholesale, Food and Beverage, Transport, Construction, Recruitment and a variety of professional business services. The company was recently awarded Financial Services Company of the Year at the Chambers Ireland InBusiness Recognition Awards 2025.
Bibby Financial Services Ireland is part of Bibby Financial Services Group, an independent financial services partner to over 10,000 businesses across 14 countries.
For more information about Bibby Financial Services Ireland, please visit: www.bibbyfinancialservices.ie
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