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13 July 2017

Why FSB is launching a new product to reduce crippling late payments for SMEs

FSB has launched a new debt management product for small businesses and the self-employed, in a bid to help them avoid the devastating effects of late payments. In the majority of cases, users can to expect to recover 100 per cent of the debt owed to them, whilst – unusually - not being charged any fees or commission.

About a third of payments to small businesses in the UK are late. Eradicating this would avoid around 50,000 business deaths a year and grow the UK economy by £2.5 billion. The average value of a late payment owed to small businesses is £6,142.

Late payment has been a huge and debilitating problem for smaller businesses for too long. Whilst we persist in asking the Government to tackle the worst payment practices, we’ve introduced this new product to empower small businesses and the self-employed to recover their debts in the most simple and effective way possible so they can focus on running and growing their businesses.

Users of the tool simply need to register online, load the debtor information and amount owed. A solicitor’s letter will then be sent on their behalf, giving a seven day deadline for receipt of payment.

In the vast majority of cases like these, a solicitor’s letter is all it takes to receive payment. In the unusual event that this doesn’t happen there are further steps that can be taken on your behalf.

The impact of late payments on small businesses can be shattering. An FSB report shows that 37 per cent have run into cash flow difficulties, 30 per cent have been forced to use an overdraft and 20 per cent say late payment has hit profits. At the extreme end, cash flow difficulties have caused businesses to fail. 

As the UK’s biggest business support group, FSB’s focus is both on successfully lobbying Government to make important policy decisions, whilst offering effective tools, advice and benefits that have a positive impact on the day-to-day lives of small business owners and the self-employed. FSB Debt Recovery will make a progressive change to the UK’s 5.5 million-strong small business and self-employed sector.

Dave Stallon is FSB’s commercial director. 

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FSB Debt Recovery from FSB

FSB Debt Recovery gives you the opportunity to recover 100% of the money you are owed and in most cases this costs absolutely nothing

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