Some 44 per cent of companies use plastic as working capital, despite the high interest rates associated with such borrowing, according to the six-monthly SME Trends Index from finance provider Hilton-Baird. More than 700 businesses were surveyed in the research.

Managing director of Hilton-Baird Financial Solutions, Evette Orams says, ‘It’s important to explore every viable route available to ease cash flow before making a decision on how to fund a business.

‘Tackling late payment is an ongoing challenge for most as it’s essentially a vicious cycle and the long-term health of a business is dependent on good cash flow.’