One expert is urging small businesses that now is the ideal time for them to review their finances.

According to research by HSBC Commercial Banking, small and medium sized enterprises (SMEs) are being hit as suppliers are billing quicker and fewer companies are paying within the agreed payment terms.

The bank's study revealed that 18 per cent of SMEs are finding they are being billed quicker by suppliers, while one in five are being affected by clients paying late.

It was also found that many SMEs are over reliant on savings and overdrafts to fund large purchases and investments.

Commenting on these findings, Noel Quinn, HSBC's head of commercial finance for Europe, advised that businesses turn to financial advisers for information on how to deal with these problems.

"Quicker billing and longer payments can put pressure on small businesses and form an unsustainable cycle but SMEs can break this cycle. Some may benefit from a review with their business bank," he added.

Recent statistics released by the National Small Business Association showed that 44 per cent of companies use credit cards, 28 per cent more than in 1993.

RELATED ARTICLES:

• Xmas parties recommended
• FPB: New rates law would damage SMEs
• Rate cut welcomed
• Lending to small firms 'not as risky as claimed'
• Queen's Speech 'offers no help for firms'