The new research from Hitachi Capital Business Finance found that the late payment crisis is so bad that 27% of UK small business owners are forgoing paying themselves a wage so they can pay their staff on time. The research also revealed that 52% of small business owners are experiencing
Paul Jennings, the Managing Director of JCB Finance has announced the launch of a campaign to offer more support to SMEs operating in the industrial sector when exploring external funding. New research that was commissioned by JCB Finance has uncovered that more than a quarter of those who responded to
As previously reported, concerns have already been raised as to the division of governmental spending between SME and larger enterprises. And while governmental figures have highlighted a marked increase in the usage of SMEs on key contracts, further woes have been raised as to the skewing of such results where
In a recent report the government has been urged to consider a more considerable approach on the procurement of services from SMEs. The report, which was produced by the National Audit Office, has highlighted growing concerns as to whether the government will be able to hit increased SME spending targets
Good news for those looking to pursue apprenticeships in the construction industry. Despite already being heralded the “way forward” for construction companies looking to overcome skill shortages within the industry, new figures released by the Federation of Master Builders (FMB) highlight how the opportunity truly does go both ways. The
BDC 319 : Aug 2024
The new research from Hitachi Capital Business Finance found that the late payment crisis is so bad that 27% of UK small business owners are forgoing paying themselves a wage so they can pay their staff on time. The research also revealed that 52% of small business owners are experiencing pain because their customers and suppliers are not paying their bills on time. At a time when there are calls for the Government to do more to tackle the late payment crisis that hits small businesses particularly hard, the Hitachi Capital research reveals that 63% of SMEs are dealing with late payment and this is having a profound impact on their ability to conduct business. “The industry and policy makers have been aware of the late payment issue for some time but our new research offers insight on its impact on small businesses. It’s gone well beyond being an inconvenience: late payment is putting jobs at risk, damaging the supply chain – and when small business owners have to sacrifice their own monthly paycheck you know the pain is really hitting home,” said Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance. Key findings: More than two in five small businesses that were struggling to survive said they were unable to pay their suppliers on time (43%). A further 29% said that late payment issues was having an adverse a knock-on affect on their long-term relationships with suppliers and customers. Chasing and covering late payments was also taking up unnecessary time and money. More than a quarter of respondents (26%) said they had wasted time and legal fees chasing up late payments, diverting significant time from running their business. With cash flow and cost control a top issue for small businesses over the summer months, almost a third of small businesses polled (31%) said they had incurred bank charges and fees for having to secure bridging finance or short-term borrowing to cover the black hole left by late payment. Those respondents that said their business was struggling to survive were twice as likely to get behind with HMRC payments as a result of late payment (23%) – and they are almost three times as likely as the UK average to say they had been forced to make staff redundant (14%).
Paul Jennings, the Managing Director of JCB Finance has announced the launch of a campaign to offer more support to SMEs operating in the industrial sector when exploring external funding. New research that was commissioned by JCB Finance has uncovered that more than a quarter of those who responded to the survey who had bank loans or overdrafts said that they felt that they felt a lower level of risk to their personal assets than was explained when borrowing from the bank. Following the results from this research, JCB Finance has launched a campaign to offer more assistance to SMEs in industry and ensure that they have better access to the funding that can help them increase their financial capital equipment without having to use the unnecessary security of their personal assets. As a part of this campaign the company will also be launching a range of exciting new services. It is important for JCB Finance to offer their customers reassurance and understanding as well as services that have been tailored to meet their customer’s’ needs. Big banks have recently been withdrawing funding for small businesses during an uncertain period when they need it the most. JCB Finance are doing the opposite and making the effort to make sure that they can offer the support that smaller businesses need to thrive and expand. JCB Finance are working to deliver support with asset finance, with hire purchase and leasing to help the smallest of companies to obtain the resources that are required to operate while also protecting the company’s capital. The research carried out by the JCB Finance also emphasised the variety of different preferences that customers have in terms of the arrangement of their finance facilities. Over half of the respondents prefer face to face meetings, whereas a quarter prefers telephone conversations. The survey also showed that 41% of SMEs find it difficult to find time in conventional office hours to arrange finance, with more than half also concerned with the cyber security of such transactions. Because of this JCB Finance will be launching their Online and Sign Online platforms that will allow for the secure and convenient signing of finance agreements with no need for printing, scanning and emailing. Customers using these platforms will also be able to access details about the agreement as well as correspondence to allow them to plan their cash flow more effectively.
As previously reported, concerns have already been raised as to the division of governmental spending between SME and larger enterprises. And while governmental figures have highlighted a marked increase in the usage of SMEs on key contracts, further woes have been raised as to the skewing of such results where subcontractor works are performed on behalf of the larger enterprises. As such, the National Audit Office has highlighted that it could not be certain as to whether there has actually been an increase in direct spending with SMEs, with the previous indirect spending figures being entirely incomparable with earlier statistics. A worrying notion, to be sure, with the NAO stressing the increased importance for more governmental focus on spending within the SME base of the supply chain. With concerns already having been raised as to the continuity of the government’s success in integrating SMEs into the supply chain more appropriately, the notion comes at a time whereby increased questions are being raised as to just how much extra is actually being spent with SMEs, both directly and indirectly. A positive sign can be seen in the increased accessibility of application for governmental works by SME practices as a bare minimum on the progress made thus far, however it is becoming increasingly evident that competing for such works and securing spending from the government may not yet be a great degree easier than has previously been seen. BIFM’s Chair of the Procurement Special Interest Group, Wendy Sutherland, commented: “The ability for SMEs to actively participate in this environment is challenging despite the best intentions of central government, as can be seen when reading the list of the successful suppliers.” Of course, as previously highlighted, the position is one whereby the government has been urged to reassess and identify further ways in which it can both engage with, and sped directly with the SME supplier base else, it is feared that targets for SME spending will not be met.
In a recent report the government has been urged to consider a more considerable approach on the procurement of services from SMEs. The report, which was produced by the National Audit Office, has highlighted growing concerns as to whether the government will be able to hit increased SME spending targets by 2020. Although, as reported by the National Audit Office, the government actually managed to reach its 2010 target of spending 25% of overall spending with smaller firms by 2015, a year earlier than the targeted end date, the report highlights concerns as to how the government will take its next step. The new target, set at 33% of overall spending,has been cited to take circa £3bn into SME businesses for central government spending alone; an ambitious target. One of the key measures which has been noted as a positive step forward is the Crown Commercial Service’s contract finder, allowing SMEs to more easily, and readily access governmental contracts worth more than £10,000. Yet, the report highlights that in certain areas of service, such as facilities management, it may still yet be too challenging for SMEs to compete for contracts against larger enterprises. With the list of successful applicants to the government contracts on the contract finder thus far highlighting a lack of success for SMEs, it is hoped that the government will assist in opening up further contracts and elements of the main contracts for subcontracting where SMEs will be able to enter the fray on a more competitive stage. As such, the National Audit Office has suggested for the Crown Commercial Service to alter its approach to procurement, by working directly with key departments to best assess where SMEs can bring the greatest amount of benefit; not solely for SME benefit, but also for the government as a whole. Additionally, suggestions have been made as to the need for oversight of key contractor to subcontractor relationships.
Good news for those looking to pursue apprenticeships in the construction industry. Despite already being heralded the “way forward” for construction companies looking to overcome skill shortages within the industry, new figures released by the Federation of Master Builders (FMB) highlight how the opportunity truly does go both ways. The figures, which form part of research undertaken by the federation for National Apprenticeship Week, showcase that almost 60% of small and medium enterprise owners actually started their career as an apprentice. Even more startling, it was also shown that over 50% of such owners actually managed to break off and start up their construction firm within a mere seven years of completing their apprenticeship; a true builder to business-owner transformation. Not only does this highlight the opportunities available to would-be apprentices should they give it their all, but also provides a welcomed spotlight on how success within the construction industry can be achieved by just about anyone, should they have the willpower and know-how. Brian Berry, Chief Executive of FMB even went as far as to say: “The construction industry is ideally suited to a young person with heaps of ambition and an entrepreneurial spirit.” Nodding to the way in which apprenticeships aren’t necessarily how often perceived, as low entry level into the industry, but actually serve as a springboard for those with the determination to succeed, effectively removing key boundaries to enter into a construction career and allowing such individuals to show their talents. And even for those not specifically looking to become their own boss, Brian Berry explains that, even for those staying in the industry the opportunities are grand, with a bricklayer of just five years’ experience traditionally earning up to £31,000 in many areas of the country, and up to £52,000 in the London area. Perhaps now, both organisation and individual may slowly begin to recognise the opportunities available through apprenticeships in comparison to those from university studies.
