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What impact could repayment plans have on your business?


Many businesses have decided to offer payment holidays or repayment plans to customers who are struggling to pay their invoices in the current climate.

Although it’s a very noble step to take – and sometimes the best way to ensure you get paid – offering payment holidays or plans can have a significant impact on your own cash flow, so it’s important to consider how well you business can manage these challenges.

Recent research by the Chartered Institute of Credit Management (CICM) found that 66% of businesses that had offered payment holiday said they would see a negative impact on revenues and profits.

Of those, 25% said the losses could amount to 40% or more and could seriously impact their own future performance and viability.

In a time of economic instability, it is worth considering all the positives and negatives before offering payment holidays to customers.

Benefits of offering payment holidays or repayment plans

Disadvantages of offering payment holidays or repayment plans

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If you’re unsure whether or not you should offer payment holidays or plans at this time, here are some more things to consider.

The economic instability we are experiencing is likely to continue for some time, and those customers who are struggling to pay now may continue to do so for some time.

The CICM research showed that the majority of businesses didn’t see an end to the payment holiday, with 82% expecting the payment holiday to last for at least another three months, and 16% of those are not expecting any payments until the end of 2020.

For those businesses being offered payment holidays, it could be that the inevitable is simply being delayed, and for the businesses offering them it could be more damaging than they anticipated.

If you feel that your business is in a financially stable position, it can be worth considering offering payment holidays on a case by case basis, after gathering as much information as you can about your customers’ current positions and cash flow forecasts over the next few months.

Are you struggling to get paid or customers aren’t adhering to a repayment plan you’ve agreed? Give us a call on 0800 9774848 or request a call back to speak to a member of our debt recovery team and discover how we can help.


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