ISME PRESS RELEASE ISME CREDIT WATCH - AUTUMN

2010
LATE PAYMENTS CONTINUE TO DESTROY SMALL BUSINESS.
• Big business and State agencies deliberately delaying payments

• Contrived delays mean Small Business waiting 73 days average for payment.

• 44% of companies experiencing payment delays of over three months.

• Lack of workable prompt payments legislation an indictment of Government inaction.

• 30 Day mandatory credit period, as initially intended, must be introduced.

ISME, October 11th, 2010

The ISME Credit Watch Survey for autumn 2010, released today, shows clearly that smaller enterprises
are being placed under severe pressure by deliberately delayed payments. Despite persistent warnings
from the Association, the current government refuses to tackle this issue as businesses go to the wall
and jobs are lost because of totally inadequate legislation.

According to ISME, Chief Executive, Mark Fielding, “Late payments have always been a problem for small
businesses and this has intensified as State bodies and accountancy led big business take longer and longer to
pay during the current recession. When smaller businesses are not paid on time, they cannot in turn pay their
suppliers and the vicious circle ends with the smallest and most vulnerable being forced to close down. The law
does the exact opposite to what was intended, in allowing powerful large customers to abuse their
dominant position and dictate unreasonable credit terms to their smaller suppliers”.

“Once more this Government has sat idly by and allowed this abusive practice to continue unabated, despite
regular warnings, backed by corroborating ISME quarterly statistics.”

The main findings from in excess of 500 respondents are:

 Actual average payment period in Ireland for SMEs is 73 days, a slight improvement from 76
days in the summer survey.
 44% are experiencing delays of 3 months or more.
 Both big business and state agencies continue to increase the credit taken.
 Small business waits 74days on average while medium firms are paid in 56 days.
 Ulster counties are the slowest at 90 days, while Connaught is best at 54 days.
 Construction firms are waiting 84 days, while Wholesale is shortest at 65 days.

The latest figures aptly demonstrate the effect that late payments are having on SMEs, in that the main victims
are small businesses caught in cycle of non payment. While the main government departments have improved
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their payments, the real offenders are the state agencies and big business where delays have increased
dramatically since the first quarter of this year.

“With the deterioration in late payments across the board, cash flow in the entire sector is drying up and
this, coupled with the lack of available, affordable credit from the banks, is putting many small
businesses at risk, with the resulting threat of closures and job losses,” continued Fielding.

The Association, once more, called on the Government to introduce a mandatory payment period, whereby all
companies, regardless of size, would be guaranteed payment within 30 days from the end of month of invoice or
delivery, as was initially intended by the legislation, with no exceptions.

“How long more must we wait for this dithering Government to act responsibly? It could immediately
alleviate some of the SME cash flow problems and begin to show that the Government is serious about
assisting small business, particularly at this moment of crisis, instead of once more patently ignoring a
sector that has contributed so much to the development of the economy,” concluded Fielding.

ENDS

For further information contact:

Mark Fielding
Chief Executive
Tel: Office: 01 6622755
Mobile: 087 2519675

RESULT OF ISME CREDIT WATCH SURVEY AUTUMN 2010

AVERAGE DEBTOR DAYS.
AUTUMN'10 SUMMER 10 SPRING'10 WINTER ‘09 AUTUMN ‘09
DAYS DAYS DAYS DAYS DAYS
DUBLIN 72 75 77 77 77
LEINSTER 75 76 79 74 77
MUNSTER 75 73 76 69 77
CONNAUGHT 54 63 62 82 75
ULSTER 90 107 79 87 61

TOTALS 73 76 76 75 76

MANUFACTURING 72 68 76 77 68
SERVICES 72 77 76 74 78
DISTRIBUTION 64 82 84 78 87
WHOLESALE 75 65 55 54 59
CONSTRUCTION 84 95 90 88 98

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