SMEs are owed by their customers a record £35bn in unpaid invoices and half of this is overdue. Most of the late payers are large corporations. Big retail chains are the worst debtors, often demanding 120 day payments terms to their suppliers and even then paying late.
The Government has announced several initiatives for providing SME’s with working capital but the combination of public sector bureaucracy and the banks’ resistance to lending is stifling.
If the government could find a way of forcing the big retail chains to pay their SME suppliers in 30 days, this would result in a cash back of some £15,000,000,000 to hard pressed owner managed businesses.
No more QE required from the Bank of England, no more time wasted by SME’s chasing payments, banks no longer pressured to lend, SME’s have their working capital restored, – QED!