Construction has one of the highest levels of unpaid bills across all sectors according to research by the Asset Based Finance Association.
The £7bn figure represents 16% of construction’s annual turnover – compared to an average of 14% across other industries.
The research showed that SMEs across all industries are owed a total of £67m with firms waiting an average of 72 days for payment.
Members of the ABFA currently provide £9bn in finance to SMEs against the value of their invoices, and at any one time will be providing £19.3 billion overall in asset based finance to businesses.
Jeff Longhurst, Chief Executive of the ABFA, said: “The scale of unpaid invoices to Britain’s SMEs has become enormous, but there is no reason for it to become a barrier to investment and growth.
“Businesses need to recognise that their unpaid invoices are an asset. In many cases, they are the most valuable asset an SME has, and they can be the key to unlocking critical and affordable funding.
“Invoice finance is playing a bigger role than ever in funding British and Irish businesses’ growth, and it is now an established part of the funding mix for a huge number of SMEs. But it can also help many more businesses.”