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Tackling late payment: a £30 billion boost for SMEs

Late payment is a problem for SMEs that refuses to go away. Fining late payers is back in the news, but invoice finance is a less confrontational solution.

With small business owed more than £30 billion in late payments according to the Forum of Private Businesses, it is understandable why there has been a renewed call for issuing fines to late payers. Only a few months ago, new Small Business Ambassador Karren Brady was calling the practice unethical, so there is a growing sense that measures to tackle the problem will get some real teeth.

However, a major issue with applying fines is the threat to the business relationship. If a small business earns a significant portion of its revenue from a single larger company, the last thing that small business owner will want to do is to put that revenue stream at risk. This is where invoice finance is a better solution for SMEs.

By using invoice finance, payment schedules can be managed professionally, with payment received on time, without the need for more pointed confrontation. Based on the Forum of Private Businesses figures, invoice finance is a tool that can help inject £30 billion into the SME sector and the wider economy.

The government is keen to see economic recovery continue, and to see small businesses play a key role in that. In today’s new business finance era, it needs a range of tools for the job and invoice finance is certainly one. Non-bank finance is being increasingly backed and, with tackling late payment and SME growth in mind, the more it becomes established as a mainstream service the better.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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