The number one financial challenge facing British small and medium enterprises (SMEs) is getting paid. 

The survey, undertaken by the Asset Based Finance Association (ABFA), revealed that nearly 50% of SMEs found it difficult to get paid by customers within their payment terms. This is reinforced by the fact that around 44% of companies have had customers asking for extended credit in the last six months. 

Kate Sharp, Chief Executive of the ABFA, responds to the key findings: "Cashflow problems, caused by limited working capital and poor credit management, is a major contributing factor to corporate failure in this country." 

"In order to reduce this type of pressure it's important to examine where the cash is being tied up. More often than not unpaid invoices are the main culprit. Britain's SMEs must keep abreast of their debtor schedule to ensure they have the capital needed to support the business."

However, four out of ten companies claimed the financial health of their business was robust and just over half (55%) predicted their turnover will increase in 2008.