Late payments by large firms are ‘deliberate’ and harm recovery, say small businesses

A new survey by small business B2B payments company Melio shows more than half of small businesses experience late payments by large companies, significantly challenging their business, delaying hiring, and harming their ability to recover from a COVID year.

NEW YORK--()--A majority of U.S. small business owners say they have direct experience with late payments from their larger corporate, public sector, and non profit clients, and half believe those delays are “deliberate” (55%) and should incur significant interest (50%), a new survey by Melio and YouGov shows.

While the survey found that most U.S. small businesses have net 30 payment terms, a majority experience late payments well past the due date, with a quarter (25%) having to wait between 20-30 days past the payment due date. Just under half (47%) say late payments by large firms have gotten worse due to COVID-19. Worryingly, 30% believe that late payments are affecting their ability to keep their business open.

Late payments have a disproportionate impact on small businesses, leaving the backbone of the U.S. economy saddled with past-due invoices. Comprising some 31.7 million firms, small businesses account for 44% of U.S. economic activity (some $9.7 trillion) and 99.9% of all U.S. businesses. According to the 2021 US Small Business Credit Survey by Federal Reserve Banks, most small businesses (78%) reported declines in revenues and 46% reduced their workforce during 2020. Late payments are making this situation worse and preventing a strong re-opening.

Melio’s survey reveals that due to late payments small businesses have or have considered delaying hiring (40%), delayed purchasing inventory (39%), or cutting employees hours (36%). If they were paid more quickly, 64% of businesses would invest in growing their businesses, or pay back loans and lines of credit more quickly (58%).

“If you’re the CFO of a large company that is in a position to pay quicker, do the right thing and pay small businesses on time. The success of these smaller businesses is key to the strong recovery of the U.S. economy,” said Matan Bar, Melio’s CEO and co-founder.

Commissioned by Melio, the YouGov survey tested the experiences small businesses have with late payments, their implications, and attitudes towards this issue. The results indicate that late payments are a persistent dilemma for small businesses, affecting their ability to maintain steady cash flow, offer employment, and invest for the future.

“While supplier credit is important to smooth out cash flow volatility in the wholesale market, late payments by large businesses are a mostly avoidable problem. Most payment terms are 30 days, so when a survey shows late payment of 20 days beyond those 30, that means a small business is waiting as much as 50 days to get paid,” Bar added.


Online questionnaire fielded by YouGov for Melio between March 26, 2021 and April 7, 2021. Completed by 1,002 U.S. B2B small businesses.

Key findings

  • 55% of small businesses think their clients are deliberately delaying payments
  • 50% say late payments should incur significant interest
  • 59% say they have direct experience with late payments
  • 44% say late payments are a challenge affecting their business
  • 47% say late payments have gotten worse due to COVID-19

Notes to Editor

Small businesses affected by late payments are available to be interviewed.

About Melio

Melio is on a mission to keep small businesses in business by helping them improve their cash flow and workflow, gain more control over their finances and optimize their business’s financial health. Melio was founded by CEO Matan Bar, CTO Ilan Atias, and COO Ziv Paz in 2018, with headquarters in New York and an R&D center in Tel Aviv. Melio's smart B2B online payment solution is tailor-made for small businesses' needs. It is a free, simple, and secure solution that allows small businesses and their suppliers to transfer and receive payments quickly and easily.


Milltown Partners
Kyle Lastovica

Release Summary

A robust, new survey of U.S. small businesses and their experiences with late payments.


Milltown Partners
Kyle Lastovica