SMALL BUSINESS owners, particularly in the manufacturing sector, are more pessimistic about the business environment than at any point since December 2009, according to the latest Small Firms Association quarterly economic update.

The association, which surveys its 8,000 members on a quarterly basis, found that while the overall business environment improved slightly in the second quarter of 2011 for its members, the outlook for the next three months is weak.

Access to credit, inflation and late payment were listed as the top concerns for businesses.

Sixty per cent of businesses surveyed said their cash flow was affected by late payments, while 61 per cent said clients were taking longer than is stated in their credit terms to complete payment. The average payment day is 61 days from date of invoice.

42 per cent of companies in the last three months have experienced an extension of credit terms taken by clients.

One in four small businesses are experiencing decreases in the availability of working capital, the survey found.

Meanwhile, a study by Certified Public Accountants (CPA) in Ireland has also highlighted the issue of credit access. Almost two-thirds of respondents said they had noted an increase in the incidence of credit facilities being reduced or removed altogether. Some 61 per cent of respondents, all representatives of the accountancy profession, said they had seen evidence of viable businesses getting into trading difficulties due to lack of credit from banks.

“The situation regarding bank credit has actually worsened over the past year despite the efforts of the Government and the existence of the Credit Review Office,” said Eamonn Siggins, chief executive of CPA.