Lancashire’s small businesses need more protection against crippling late payments from their customers, according to a local business leader.

Norman Tenray, managing director of Longridge-based builders’ merchants, OBAS UK, said research showing that businesses are owed £14.2 billion by customers who are paying later than their agreed terms was evidence of the problem.

The figure unveiled by Bacs Payment Schemes Ltd, the company behind Direct Debit, showed around a third wait longer than agreed terms of payment.

OBAS UK is sponsoring the Small Business of the Year category at this year’s Be Inspired Business Awards, the BIBAs, which holds its annual ceremony next Friday night.

Mr Tenray said: “The fact that the amount owed to small businesses is down from previous years further underlines the scale of the issue which is crippling a crucial sector of our economy.

“There are business organisations like the Chambers of Commerce which are speaking up about this issue but it needs action to protect small businesses from debts they can ill afford.

“If businesses are having to lay people off or even consider going out of business, it has got beyond the point where we can stand back and watch.”

The BIBAs will be handed out in front of a sell-out crowd at The Blackpool Tower with 18 prizes to be handed out to leading lights of the Lancashire business community.

A further award, Lancastrian of the Year, the awards’ lifetime achievement prize, will also be handed out on the night.

Its current holder, Mike Peters, the Fylde-based entrepreneur who set up Universal Products Limited, follows in the footsteps of the likes of Edwin Booth, the chairman of the North West supermarket chain, Booths, and Farmhouse Biscuits founder, Philip McIvor.

Babs Murphy, chief executive at awards’ organisers, the North and Western Lancashire, said: “The Lancastrian of the Year is an award selected by the former winners of the prize in recognition of outstanding contribution to the county.

“The calibre of the former winners of this prize is evidence of how prestigious it is and the 2017 winner will be no exception.”