The average SME is owed £22,000 in late invoices. That’s money that should be paying wages, buying stock, or covering rent. Instead it sits in the bank accounts of big customers who treat small suppliers like an interest-free loan.
According to the Federation of Small Businesses, late payments cost the UK economy £2.5 billion a year and force 50,000 businesses to close annually. One in four insolvencies is directly linked to cashflow problems caused by slow payers.
Large firms know they can delay 60, 90, even 120 days with no real consequences. Meanwhile the café, printer, or builder waiting for payment can’t pay their own bills. It’s not just unfair; it’s destroying the supply chain that keeps Britain running.
The fix is simple and proven: make 30-day payment terms mandatory on all contracts over £50,000, with automatic fines starting at 8 % plus base rate for every day late. Mexico, Spain, and France already do it – and their late-payment rates have fallen by over 40 %.
This isn’t about punishing big companies; it’s about fairness. Prompt payment should be the norm, not a favour. Give small firms the cash they’re owed when they’re owed it, and watch growth, jobs, and confidence return.
Britain’s SMEs shouldn’t have to beg for money they’ve already earned.
The 1832 Club is fighting for these changes. The more members we have, the louder our voice in Westminster.
Join today from just £5/month or £40/year and help to support pro-SME candidates.
Together we can make a difference.