For start-ups and small businesses, customers aren’t just validation—they’re the reason a business can keep the lights on. In an ideal world, paying customers would fund growth, not loans or investors. But for many startups, especially those working with large organisations, that dream quickly gets derailed by one major issue: late payments.
The reality is that long payment cycles are choking cash flow and stalling innovation. Imagine delivering your product or service to a large corporation, only to wait 90 or even 100 days to get paid. That’s over three months—nearly a third of the year—spent chasing income you’ve already earned. For startups, that delay isn’t just frustrating; it’s a potential dealbreaker.
Why Late Payments Are Such a Problem
Yes, large organisations often have internal processes and checks that take time. But these delays can cause huge problems for the startups they partner with. Here’s why:
Cash Flow Is King: Most startups don’t have the luxury of sitting on months of reserves. They need money coming in regularly to pay salaries, run operations, and invest in growth. When payments are delayed, the entire machine grinds to a halt.
No Negotiating Power: Startups rarely have the leverage to push for better payment terms. They’re often too small to demand faster payments and too reliant on the contract to risk walking away.
One Delay Can Spiral: A single late payment can create a domino effect. Startups might need to borrow money to stay afloat, delay hiring, or postpone critical investments. All of this stunts growth and holds back progress.
What’s at Stake
Startups are engines of innovation. They create bold solutions, take risks, and solve problems in ways that larger organisations can’t. But all of that comes with a cost. Without reliable cash flow, even the best ideas can wither.
For large organisations, working with startups is a way to inject fresh ideas and agility into their own operations. But slow payments cut off this innovation at its source. It’s like hiring a chef to create a masterpiece but forgetting to turn on the stove.
What Needs to Change?
Late payments aren’t an unsolvable problem. Here’s what large organisations can do to support startups and create a more balanced relationship:
Faster Payment Terms: Shorten payment cycles to 30 days or less, especially for smaller contracts. This simple step could be transformative for startups.
Milestone Payments: Instead of waiting until the end of a project, split payments into stages tied to key deliverables. That way, startups get paid as they deliver.
Startup-Specific Processes: Create fast-tracked payment protocols for smaller businesses, with fewer hoops to jump through.
Open Dialogue: Engage with startups to understand their needs and work together to create terms that work for both sides.
A Call for Change
It’s time to rethink how large organisations work with startups. This isn’t just about fairness—it’s about creating an ecosystem where innovation thrives. Every delayed payment puts a startup or small business at risk and stifles the broader impact of their ideas.
At Payment Bear, we know how critical cash flow is for small businesses and startups. That’s why we’re committed to helping businesses get paid faster and more efficiently.
