New EU report raises the alarm: 3 out of 4 SMEs affected by late payments – how to secure your liquidity

Unfortunately, it has become the "new normal" for small businesses to act as a free bank for large companies. Brand-new figures from the autumn show that the problem of late payments is worse than ever. At kompasbank, we see this trend clearly, but we also know that you don’t need to wait for EU legislation to protect your business.

You’ve delivered the product. The customer is satisfied. The invoice has been sent. And then you wait. And wait.

If you recognize this scenario, you’re not alone. A new study, published by the European Commission and SMEunited in October 2025, paints a bleak picture of the payment culture in Europe: As many as 73% of small and medium-sized enterprises (SMEs) struggle with late payments.

The big ones use the small ones as a bank

The report reveals a widespread issue, where large companies in particular use their power to impose unreasonably long payment terms – often 60, 90, or even 120 days. At the same time, the data shows that the risk of not getting paid increases the longer the delay.

Henrik Larsen, Head of Revenues Direct at kompasbank, calls the development a dangerous brake for the Danish business community:

"It is paradoxical that the smallest companies often have to finance the liquidity of the largest. When an SME has to wait 90 days for payment, it freezes the capital that would otherwise have to be spent on salaries, development, and new orders. You simply risk slowing down your own growth while waiting for your own money."

Currently, politicians in Brussels are discussing a statutory cap of 30 days' payment, but the negotiations are ongoing. The big question is: What do you do in the meantime?

Make your liquidity robust – regardless of customers' payment deadlines

At kompasbank, we meet healthy companies every day that are squeezed for liquidity, not because business is going badly, but because the money comes in far too late.

We don't believe that the stability of your business should depend on whether your customers pay on time. Therefore, we have three valuable tips for SMEs that are challenged by late payments: Overview, buffer, and advice.

1. Get an overview before the storm hits

Many SMEs manage their business based on their current account balance. But in a market marked by late payments, it’s crucial to look ahead. With cash-flow forecasting, we help you spot the potholes before you hit them. By understanding your fixed expenses versus your expected (and potentially delayed) incoming payments, we can predict – down to the week – when the upcoming month may become critical. Knowing this, instead of guessing, gives true peace of mind.

2. Establish a “parachute” in your finances

When important customers pay late, you need a parachute that can keep your business running for longer. In these cases, a flexible overdraft facility or a bridge loan is often the most effective solution.

But according to Henrik Larsen, a liquidity buffer isn’t just about defense – it’s also about enabling you to run a better business:

“Many see an overdraft as an emergency measure, but they should view it as a business tool. With a buffer behind you, you can seize the moment and buy in bulk when a supplier offers a great deal, or ensure your inventory is stocked for Black Friday without emptying your cash reserve. It gives you stronger negotiating power and peace of mind, knowing you don’t have to turn down good opportunities due to a lack of liquidity in the moment.”

So it not only ensures that you can meet your obligations when customers fall short — it also ensures that you’re ready for growth.

3. Use the bank as a sparring partner

It’s not just about products, but about behaviour. We often advise our customers on how they can optimize their cash flow:

• Can you require an advance payment when starting new projects?

• Should larger orders be invoiced in instalments instead of all at once at the end?

• Do your payment terms align with the ones you offer your customers?

Shall we take a look at your buffer?

You can’t always change your customers’ poor payment habits, but you can change how hard they hit you.

At kompasbank, we specialize in helping SMEs navigate exactly these challenges. Let’s have a conversation about how we can build a strong liquidity buffer into your finances, so you can focus on running your business instead of chasing payments.

Book a meeting here.