In a challenging and uncertain economic environment, companies across Latin America are tightening their credit policies to safeguard their financial stability. However, these stricter terms are not enough to slow the increase in late payments. Today, nearly 8 out of 10 businesses report payment delays, a growing trend despite shorter payment terms. This combined dynamic highlights intensifying cash flow pressures across the region, driven by high financing costs and strong competitive pressures.
Key takeaways
- 79% of companies report late payments, marking an increase compared to last year
- Payment terms are shortening (averaging 56 days), reflecting a more cautious approach to credit
- Payment delays are more frequent, yet shorter (33 days), indicating improved credit management despite ongoing pressure.
Payment terms: shorter yet more widely used
In 2026, 95% of companies extended payment terms to customers, up significantly from 88% in 2025. Meanwhile, the average credit period decreased from 59 days in 2025 to 56 days in 2026. This shift is largely driven by the growing use of very short-term payment options (0–30 days). Brazil and Argentina continue to offer the longest average payment terms (66 days), while Peru records the shortest and remains the least impacted (43 days).
Data for graph in .xlsx format
The wood sector remains the most restrictive, while automotive and pharmaceutical sectors offer extended terms
From a sector perspective, the wood industry stands out as the most restrictive, with an average payment term of 40 days and all payments completed within 60 days. In contrast, the automotive and pharmaceutical sectors provide more flexible payment conditions, with 25% and 19% of transactions respectively exceeding 90 days.
Data for graph in .xlsx format
More frequent but shorter payment delays
Late payments are becoming increasingly common, with 79% of businesses affected, compared to 77% in 2025. This trend is even more pronounced in Brazil, Chile, Ecuador, and Peru, as well as across nine different industries. Despite this rise, the average delay duration has decreased to 33 days, down from 42 days in 2025, suggesting more efficient collections and credit control processes. On a country level, Peru reports the shortest delays (24 days), while Ecuador experiences the longest (44 days).
Data for graph in .xlsx format
The main reasons mentioned for late payments are
- customer non-payment or defaults (63%),
- followed by weak market demand (29%)
- and intense competition (26%).
High financing costs (19%) also remain a critical concern, particularly in Brazil.
2026: businesses remain optimistic but cautious
Nearly 70% of companies anticipate improved performance in 2026. Nevertheless, key risks persist, including economic slowdown (24%), intense competition (21%), geopolitical uncertainty (13%), and exchange rate volatility (8%). High interest rates and financing costs are also highlighted as ongoing risks (7%). In this context, effective cash flow management and accurate customer risk assessment will be essential priorities for businesses in 2026.
