Suppliers to large corporates have no choice but to take on more debt as payment terms are stretched further, according to investment bank Investec.

Suppliers to large corporates have no choice but to take on more debt as payment terms are stretched further, according to investment bank Investec.

Culprits include Marks & Spencer, which recently announced that it would double payment terms for many of its suppliers from 30 to 60 days.

Gary Edwards, head of the bank’s growth and acquisition finance division, says, ‘We have seen a substantial increase in demand for financial support from suppliers who have an increased working capital requirement due to the extension of payment terms at a time when increased funding was already needed to finance growth.’

Some 94 per cent of companies report that their customers are asking for extended payment terms, according to the Credit Research Foundation.