Todd Davison, managing director of Purbeck Insurance Services, the provider of personal guarantee insurance to small businesses, said: “These reforms are a significant and much-needed step forward in tackling the UK’s late payment crisis.
“Giving the Small Business Commissioner real powers to investigate, adjudicate and fine persistent offenders sends a strong message that poor payment practices will no longer be tolerated.
“Late payment continues to put huge pressure on SMEs, with many effectively forced to bankroll their customers.
“Amongst our SME customers, 40 per cent have taken on loans with personal guarantees just to manage cashflow and keep afloat.
“Furthermore, our research shows 77 per cent of SMEs are owed money and 60 per cent say it’s harming their business.
“Measures such as mandatory interest, 60-day maximum payment terms and greater board-level accountability should help drive both behavioural and cultural change.
“The key now will be robust enforcement to ensure these reforms deliver real impact for small businesses.”
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