A new survey has revealed that as many as 61% of the UK’s smaller sized businesses were impacted by late payment over Q1 of this year.
The FSB’s Small Business Index shows that along with late payment issues, successful finance applications have plummeted to the lowest level on record.
As a result of this, the FSB is calling for culture change and action on supply chain practice, as well as warning that banks ‘pulling up the drawbridge’ to small firms will further stifle economic growth.
FSB National Chair Martin McTague, explained, “Lenders pulling up the drawbridge for small firms will threaten our already faltering economic recovery.
“Businesses are born every day across the UK – many need funding to get off the ground, ensuring they reach a stage where they’re profitable and creating opportunities.
“A lot of those who’ve worked tirelessly to adapt, survive and thrive over lockdowns need finance too, empowering them to take their firms to the next level, driving our economic recovery and the transition to net zero in the process.”
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Email JaimeMcTague added, “A big chunk of what little finance is being accessed is being used to manage cashflow challenges as our late payment crisis worsens, rather than for much-needed investment and innovation.
“The government should accelerate delivery of our proposal to make Audit Committees directly responsible for supply chain practice to address this worrying trend.
“Culture change is what’s needed here – lenders taking an objective approach to small business finance and big corporates putting best supply chain practice at the heart of environmental, social and governance programmes.
“The result would be win-win: strength in corporate supply chains and a thriving small business community driving economic growth from the ground up.”
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