According to new research the UK’s start-up population is increasing at record levels but many of these new firms struggle to survive more than two years, with late payments being one of the main obstacles to longevity.

Around 50,000 businesses are launching every month, with 587,000 created last year alone, over 70,000 more than in 2013 and four times the number registered 20 years ago, when only 130,000 were set up.

However, while the number of start-ups is at record levels, the research found that they are having to negotiate a series of “potential pitfalls” to make it to their second birthday, with late payments being chief amongst them.

Micro-businesses with one or two employees were found to be the fastest at settling invoices between April 2014 and March this year, yet sole traders and partnerships took on average 20 days more than the agreed term to settle their debts and businesses with six to 10 employees took an extra 21 days. However, the worst offenders at paying late were found to be large firms with 500 plus employees, who took around 34 days beyond term to pay.

In the light of the research, Experian, which undertook the study, has announced it is offering small businesses the opportunity to access credit reports on potential customers for only £99 in a bid to help business owners make “smarter credit decisions”. Firms taking up the offer will also receive £20 in marketing credit.

A spokesman for the credit checking organisation said that while it has never been easier to set up a business, it has also never been harder to overcome the risks posed by late payment and customers falling into insolvency. Therefore checking the credit reports on customers and suppliers could help the business survive beyond the crucial two-year mark.

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