UK small and medium businesses are being paid late to the tune of £39.4 billion, new calculations have revealed.

Research by Bacs Payment Schemes shows that the problem is particularly bad for smaller companies, who shoulder a much larger proportion of late payments than corporates.

Big companies are owed £6.7 billion, around 15 per cent of total unsettled debts.

The figures also show that around six in 10 small businesses are experiencing late payment right now, with the average SME waiting for £38,186.

Meanwhile, the average corporate is owed £1 million.

Mike Hutchinson from Bacs said: “SMEs, which everyone agrees are the drivers of a successful economy, are being held back because of the increasing pressures of late payments.”

Federation of Small Businesses national policy chairman Mike Cherry said: "These latest figures are a further reminder of the major headache caused by late payments.”