New initiatives to support small businesses

Small businesses are the lifeblood of our communities and play an essential role in delivering growth; 99% of businesses in the UK are small businesses and they employ over 60% of the workforce.  

It goes without saying that healthy cashflow is desirable across all sectors, which have faced unprecedented challenges over the past few years, from the pandemic to rising inflation, interest rates and energy bills.

We find that small businesses are often owed debts disproportionate to the size of their business. The balance of power can shift to the customer who dictates the payment terms outside of the small business standard terms. Smaller businesses tend to run their operations leaner, and all of these recent challenges are having an adverse effect on their cashflow.

Using effective financial management and tackling late payments are a necessary part of running a business and the Government has recently unveiled new initiatives to support small businesses and improve access to cash.

The Fair Payments Code has been introduced to tackle late payments and to make sure small businesses get paid on time. As well as rewarding good practices, these plans aim to create better cashflow, which, in turn, helps to drive growth, and create more jobs in small and medium enterprises.

This new code replaces the old ‘Prompt Payment Code’ and features a tiered gold, silver and bronze award system to help smaller firms identify reliable and trusted partners.

Sign-up is voluntary, and businesses can apply for any award level, if they meet the criteria. If they fall short, they can be considered for a lower level or receive an action plan to help them improve.

You can sign up and find out more about the Fair Payment Code here: https://www.smallbusinesscommissioner.gov.uk/fpc/

Additionally, the Disability Finance Code for Entrepreneurship has been launched to support disabled entrepreneurs.

This code is backed by major UK banks, and is intended to drive greater engagement between the financial services sector and the disabled entrepreneur community through:

• building stronger relationships, opportunities, support and mentoring
• committing to improve access to finance products
• showcasing more success stories, and
• actively supporting diverse representation in their firms.  

These initiatives have been designed to provide targeted support to small firms and entrepreneurs, especially those facing challenges in accessing finance and support.

Need help?

Please get in touch with us for a no-obligation chat about funding or any other business or tax needs.

You can find contact details on the Our People section of the Larking Gowen website. Alternatively, you can call us on 0330 024 0888 or email enquiry@larking-gowen.co.uk.

Joanna Burton