Late payment hitting small business |
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| Finance | |
| Written by Gary Howes | |
| Monday, 09 February 2009 | |
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The Federation of Small Businesses (FSB) welcomed Octobers announcement that the government would strive to settle payment with its small business suppliers within 10 days. However a report by the FSB today says a fifth of its members have reported the government has taken longer than 10 days to honour payment.This accusation is contained in a statement outlining the perceived failings of the governments economic stimulus plan by UK small business. The statement also shows that small businesses are increasingly being used as a source of credit in the commercial world with over a third (36 per cent) waiting longer to get paid for private sector work. This comes despite the Government-backed Prompt Payment Code, launched last November, which called for fairer payment practices between large and small businesses. The FSB said that after a member survey it was found that recent VAT cuts, bank lending guarantees and pledges on payment practices have had no impact on stimulating the economy. The FSB poll of more than 4,000 small businesses showed that over half have seen their trade decrease in the last two months - despite a cut of 2.5 per cent in VAT last November; the introduction of the Government backed Enterprise Finance Guarantee in January; and calls for the public and private sector to settle their invoices more quickly. Only eight per cent of small businesses said their banks were making the Enterprise Finance Guarantee available to them. Meanwhile over half (53 per cent) of those polled said they doubted that the Government scheme would actually compel the banks to start lending again. Comments (0)
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