Lindsay Whitelaw (CEO of URICA) comments on Business Secretary Sajid Javid’s announcement that there will be an establishment of a small business conciliation.
“The announcement of a small business conciliation is both positive and exciting news for British business. It has the potential to help SMEs who are in particularly bad situations with certain clients, where payment terms have been violated and there is a clear risk of non-payment. Reducing legal costs for small businesses also increases their ability to act against larger firms, so this may discourage larger firms from breaching the Prompt Payment Code.”
“In spite of these benefits, it doesn’t address the broader issue that many business owners face. Even if clients meet the 60-day limit under the Prompt Payment Code, businesses that need to invest to deliver orders and grow will find themselves with tight cash-flow constraints. That is especially true if invoices can only be submitted on delivery of work, because many businesses – like in the auto industry – might be delivering projects that run over months, or quarters.”
“At URICA, our sales pipeline depends on a healthy British economy, with plenty of small businesses that need finance for growth. Therefore measures to reduce legal costs and help these firms tackle overdue payments.”
“We are therefore focusing is on companies that have a solid customer base, but whose growth potential means that working capital is under pressure. The UK economy is expanding, driven by SMEs, and so we see a strong need for our offering.”