Big firms must be properly penalised for late payment

52% of small firms just ‘treading water’, rising to 72% in East Midlands

December 2022:  Purbeck Personal Guarantee Insurance has welcomed the Government’s review into the late payment practices of big firms[i] but is calling for tougher measures to stop the stranglehold larger businesses have over their smaller suppliers, once and for all. Recent research by the personal guarantee insurance provider to small business owners[ii] found that rather than planning for growth, 52% of small firms are just focused on ‘keeping on an even keel’ in the year ahead.

Underlining the importance of the levelling-up agenda, Purbeck found that almost 3 in 4 small firms in the East Midlands are solely focused on keeping business on an even keel – this is more than any other region.  Just 28% of small firms are planning for growth in the East Midlands compared to 43% in the South East and 40% in London and East Anglia.

Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “After a resurgence in Covid infections and Brexit, late payment was a top concern for small businesses last year[iii].  We’re now in very different waters and it’s vital big businesses are properly penalised for the harm they cause when they pay their small suppliers late. Cashflow problems not only stymie growth, it forces some small firms into taking on finance just to keep their heads above water.  This isn’t right or fair.  We are all in the same boat right now and big firms need to find more ethical ways of managing their own cashflows rather than taking the easy route of delaying payment to the time it suits them, rather than the time stipulated by their supplier.” 

Ends

Notes to Editors

About Purbeck Insurance Services

Purbeck Insurance Services is a Personal Guarantee Insurance specialist supporting Small and Medium sized Enterprises (“SMEs”) and promoting business confidence

Insurance policies backed by Markel International Insurance Company Limited (“Markel”), an A-Rated insurer, as rated by A.M. Best (A), Fitch (A+) and S&P (A). Markel is a shareholder in Purbeck Insurance Services.

Purbeck Insurance Services is directly authorised and regulated by the Financial Conduct Authority

Insurance is underwritten by Purbeck Insurance Services, an authorised Managing General Agent (“MGA”) of Markel

Purbeck Personal Guarantee Insurance is annual insurance policy that provides Director(s) with insurance cover in the event their business lender calls in the Personal Guarantee (provided by the Director(s) as part of raising business finance)

Key features of Personal Guarantee Insurance:

• Premiums are competitively priced and based on individual circumstances
• Cover is available for Personal Guarantees signed to support a wide range of business finance facilities

For further media information please contact Alison Reeson at HSL on 07876 597466, or purbeck@harrisonsadler.com.

[i] https://www.gov.uk/government/news/business-secretary-launches-review-to-prevent-small-firms-from-being-ripped-off-by-larger-companies

[ii] Survey undertaken on Maru/Hub October 2022 by Purbeck Personal Guarantee Insurance of 1000 business owners or managers in small businesses.

[iii] Survey conducted May 2021 via Cision of 1000 SME Owners and Directors