So, how is the new Business Secretary going to tackle late payment? His pledge is welcome but it’s hardly a new one. What can we hope for? How about more support for alternative finance?

At this stage, it appears Sajid Javid wants to take on the issue of late payment through the creation of the new Small Business Conciliation Service, which will help resolve disputes between SMEs and larger firms. With small businesses owed over £32 million in late payments, and with a reluctance to risk relationships by initiating legal proceedings a key contributory factor, it will be interesting to see how the Service will go about addressing the problem.

Small business owners won’t need reminding of the ineffectiveness of the Prompt Payment Code and the past pledges of politicians that have borne little in the way of fruit – for example, last year Small Business Ambassador Karren Brady made a point of highlighting her desire to combat the problem of late payment, but as yet, progress has been minimal.

One way of tackling the problem without jeopardizing contracts is by using invoice finance. Alternative finance has gone from strength to strength in recent years, with services such as invoice finance, peer-to-peer lending and crowdsourcing helping to fill the SME lending gap left by cautious traditional lenders. Javid would do well to further explore the alternative finance sector in terms of improving access to SME finance.

The new SME lending deal between challenger bank Metro Bank and a leading UK peer-to-peer lending platform illustrates the continued rise of alternative finance. It also underlines the fact that traditional banks will have to go a lot further than launching new SME finance funds to regain the business that they’ve lost.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.