Slow payer laws to cover small business

By FWi staff

DRAMATIC changes to debt legislation could end the nightmare of overdue debts experienced by many small businesses.

A law passed in 1998 already allows small businesses to claim interest from large firms and the public sector on overdue payments.

A review of this Act by the Better Payment Practice Group (BPPG), which includes the NFU and British Bankers Association, means that from 1 November small businesses will also be able to claim interest from other small businesses on debts incurred under contracts agreed after that date.

More than one in 10 small businesses have stated that they will use the legislation, and the number is increasing, research by the Credit Management Research Centre at Leeds University suggests.

“Small businesses should start preparing now,” says Nick Goulding, of the BPPG.

“The legislation is an important tool in the credit management process.”

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