Late payments are a massive issue, especially for small businesses. According to the government, around 38 businesses shut their doors every day because they weren’t paid on time. To fix this, big changes are being rolled out that are designed to improve cash flow for small businesses and unlock up to £11 billion in potential growth.
At the heart of this change is the Small Business Commissioner, Emma Jones CBE. Here’s what’s coming:
- Big companies could face surprise inspections into how they handle supplier payments
- A new rule that will require any invoice issues to be raised within 30 days of receipt
- A hard cap on how long businesses can take to pay – 60 days to start, but moving down to 45
There will also be stricter checks: large companies will need audit committees to keep tabs on payment practices, and if they pay late, they’ll face mandatory interest charges.
Prime Minister Sir Keir Starmer summed it up: “Small business owners are spending too much time chasing invoices instead of focusing on their business. It’s unfair, it’s draining, and we’re putting a stop to it.”
Backing Small Businesses with New Financial Support
But payment reform isn’t the only thing in the works. A new £4 billion support package is also on the table to help small businesses grow and thrive.
Here’s what’s included:
- £1 billion is being set aside for Start-Up Loans. These are personal loans with a 6% fixed interest rate, now increasing from an average of £12,000 to £15,000. Around 69,000 new entrepreneurs are expected to benefit.
- An extra £3 billion is going into the British Business Bank’s ENABLE programmes, which gives lenders government-backed guarantees so they can offer better loan terms with less risk.
Making Life Easier for High Street Businesses
High street businesses, especially in hospitality, have been through a tough time. The government is planning several updates to make running a high street business simpler and more sustainable.
A few of the standout plans include:
- Reforming business rates by 2029, with lower rates for retail, hospitality and leisure properties under £500,000 in value
- Launching a £350 million fund to support projects in communities across the UK
- Banning ‘upward only rent reviews’ in commercial leases to help make rents more predictable and fair
- Expanding the High Street Rental Auctions to turn empty buildings into active businesses
- Introducing a new ‘Right to Buy’ scheme so communities can take ownership of important local spaces
- Improving public safety with 13,000 additional police officers and working with business groups to reduce crime, like shoplifting or tool theft
The government also wants to cut through red tape to help high street businesses stay open longer and offer more outdoor dining, bringing back vibrancy and helping boost local economies.
All in all, these changes aim to give small businesses the support, security, and freedom they need to succeed – whether they’re just getting started or have been serving their communities for years.
