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Published in association with
THE BANK of England’s Monetary Policy Committee’s voted in June to keep the base rate at 4.25%. This was not unexpected, given recent inflation readings being higher than their target.
However, small firms in Northamptonshire and beyond need improvements in access to funding.
In our latest Small Business Index, over four times as many small firms rated the availability of new credit as ‘poor’ than rated it as ‘good’ and they will be hoping for rate cuts in the near future.
Late payment issues are also exacerbated by high interest rates, as large corporates which are feeling pressure from their own leveraged positions use their suppliers as a source of, essentially, free credit – an issue long lamented by SME supply chains.
Government needs to ensure it delivers on its plan to tackle late payment by banning large firms with poor payment practices from applying for grants and implementing audit committees and boards of large businesses to oversee and review payment practices to improve transparency and accountability.
A further incentive, if needed, is that stamping out late payment will mean fewer small firms having to apply for emergency loans to keep themselves afloat while waiting for invoices to be paid, especially painful in this high-interest environment.
FSB research shows that 440,000 firms are put at risk of closure every year due to late payment and many more have their growth and investment plans stifled.
This summer is packed with festivals and events across Northamptonshire and, while we are enjoying everything our county has to offer, let’s also champion our local businesses, calling on support from government, big business, customers and communities alike to give them the boost they truly deserve.
Jennifer Thomas is the FSB’s development manager in Northamptonshire.
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