The Small Business Plan promising SMEs the tools they need to grow has been published by government. This includes better access to finance and stronger powers on late payments.
Small and medium sized firms employ 60% of the countryโs workforce and generate ยฃ2.8 trillion in turnover. But ministers say, for too long, the odds have been stacked against small businesses.
Government’s Small Business Plan promises action to change that. At its heart is proposals to introduce the toughest laws on late payments in the G7. There’s also better access to finance, including via the British Business Bank.
It follows the recent publication of the long-term industrial and trade strategy thatโs helping businesses plan ahead with confidence.
Scroll down to see how this could impact your Surrey business.
Late payments
Government estimates late payments cost the UK economy ยฃ11 billion per year and closes down 38 UK businesses every day.
New laws will give stronger powers to the Small Business Commissioner. It will empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.
The Small Business Commissioner will have new powers to carry out spot checks and enforce a 30-day invoice verification period to speed up resolutions to disputes.
Upcoming legislation will also introduce maximum payment terms of 60 days, reducing to 45 days – giving firms certainty theyโll be paid on time.
Audit committees will also be legally required to scrutinise payment practices at board level. It places greater pressure on large firms to show theyโre treating small suppliers fairly.
Mandatory interest charges for those who pay late will also be introduced.
These changes will also save small businesses valuable time, freeing up hours currently spent chasing overdue invoices so they can focus on growing their business instead.
A consultation on the proposed changes is running on the government website.
Access to finance
Many small firms struggle to secure the funding they need to invest, expand, or even survive. This is despite the UKโs world-leading financial services sector.
So, Government is launching a new ยฃ4 billion wave of financial support for small businesses. It includes a ยฃ1 billion boost for new businesses. Plus 69,000 Start-Up Loans and mentoring support to inspire the next generation of entrepreneurs and small business owners.
The Government is also delivering a new ยฃ3 billion boost to the British Business Bank – raising the total guarantee to ยฃ5 billion. This will help lenders offer more small business loans through the ENABLE programme – providing a government-backed guarantee, better loan terms and lower interest.
Other changes
- Slashing of red tape to boost the hospitality and arts sector through hospitality zones and licensing reforms
- High Street Rental Auctions to fill vacant high street premises
- A revamped Board of Trade to get more small firms exporting around the world
- The new Business Growth Service to ensure SMEs have access to key support
- Plans for permanently lower business rates multipliers for the hard-hit retail, hospitality and leisure sector.
Small Business Plan – reaction
Michelle Ovens CBE, Founder, Small Business Britain, said:
โI am thrilled to see the Small Business Plan launched today, putting the nationโs smallest businesses at the heart of Government strategy where it should be. These job creators and economy builders will benefit from a huge boost to funding through the British Business Bank, a boost to skills, support for high streets and a long hoped for legislative backing for getting paid on time.
“We will not see economic growth without small business growth. So I am eager to get on and help the Government deliver on this agenda – and help small businesses regardless of their background start, grow and thrive.โ
Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB), said:
โMaking sure businesses are paid on time, that our high streets thrive, and creating conditions in which everyone can start and succeed in business are crucial priorities for small businesses, communities and the economy.
โTodayโs plan is an encouraging commitment from the Government to take the side of small businesses in the great growth challenge ahead.โ
Support for your small business in Surrey
Business Surrey provides free and accessible support for all, no matter the size or stage of journey.
We recognise you may need additional help, either via email, phone or face-to-face. So you can get in touch with our expert enterprise advisors at any point.
You can also:
- access an easy-to-use support directory with more than 120 national and regional schemes.
- list of events across Surrey to support networking and shared learning
- register to receive our regular newsletter, including news on funding, events, free training and support for all Surrey businesses.
