Simon Nash 0

Force Large Companies To Pay SME Suppliers within 30 days

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Over 90% of business are Small & Medium Sized Enterprises (SME's), accounting for a massive proportion of GDP (around half in the UK). It therefore follows that recovery and growth in the economy and in employment will rely on the SME sector. SME's are struggling to grow through lack of working capital and the banks are failing to get adequate lending out to the sector in any meaningful way due to perceived risk. At the same time, larger business are using their relative power to maximise their own cashflow by extending payment terms to their suppliers, which are often SME's. The result is a starving of cash in the SME sector. Legislation should be introduced requiring "large" businesses to pay their SME suppliers no later than 30 days from the date of invoice or supply. This would very quickly result in an enormous flow of cash into the SME sector to fund growth. This would also leave the banks positioned to lend to the larger corporations which generally have a much lower risk profile.


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