Here are the week’s main news stories in the world of small business and e-payments:
Major government outsourcers take more than six weeks to pay suppliers
Some of the biggest government outsourcers took over 6 weeks to pay their suppliers in 2017, 11 per cent longer than two years earlier, according to research by online business finance supermarket Funding Options. Many of these suppliers are SMEs operating with a small cash cushion. Late-paying clients can easily wipe out a small businesses’ short-term liquidity and even push them into insolvency. Small businesses who supply government outsourcers are being forced to wait longer despite those outsourcers benefiting from quicker payments from the government.
Malaysian banks ramp up cashless payments
Malaysian consumers can now conduct instant P2P payments using just the recipient's mobile phone, passport or identity card numbers via the country's Real Time Payments platform, implemented by Payments Network Malaysia (PayNet). Backed by Malaysia’s banking sector, DuitNow allows bank customers to send money instantly and securely to accounts that are addressed by easily-known identifiers. PayNet is also implementing an interoperable QR code initiative that enables participating e-wallet services to use a single QR standard for payments on goods and services. This means consumers won’t need to switch between the different services provided by banks and non-banks to make payments.
Scottish small businesses to benefit from government investment
Small businesses across Scotland will be able to access more than £100 million to help them expand, the Scottish Government has announced. Through the Scottish Growth Scheme, SMEs will have the chance to apply for financial support via appointed fund managers. Funding options include microfinance loans of up to £25,000, debt or loan finance of up to £100,000, and equity investment in deals of up to £2 million. As part of the initiative, Scottish Enterprise has also introduced a loans scheme in the range of £250,000 to £2 million, or up to £5 million in exceptional circumstances, for growth-focused SMEs with a viable business plan and a clear ability to repay the debt.
Sheffield the best UK city to start a small business
Sheffield is the best UK city to start a business in 2019, according to research by card payment solutions provider Paymentsense. The city is known for its rich industrial heritage and still develops advanced manufacturing technologies through its two universities and other research organisations. It’s also a major centre for sport and its public sector is a major employer. The five-year start-up survival rate in Sheffield is 44.9 per cent, compared with 39.3 per cent for London (which is in fifteenth place), while other factors that make the city a good environment for prospective SMEs include the number of people employed, average weekly pay and overall cash flow.
Start-up bank to open Manchester SME hub
Clydesdale and Yorkshire Banking Group (CYBG) plans to open an SME hub and retail store in the centre of Manchester. The proposed investment is part of the expansion of the retail and SME offering of ‘B’, the group’s digital banking brand. B Works will comprise a business banking centre, co-working space, private meeting rooms and a programme of business events, among other initiatives. Henri Murison, director of Northern Powerhouse Partnership, said B Works is “a huge vote of confidence for the North West's SME community and highlights the strength of Manchester as a place for new, growing businesses".
Tide and ClearBank bid for RBS bail out cash
ClearBank, the first new UK clearing bank in 250 years, has partnered with SME challenger bank Tide to apply for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. The bid combines ClearBank’s payments infrastructure and Tide’s digital banking platform with the aim of offering a genuine alternative to the high street banks. If the bid is successful, the funds will be used to tackle barriers to change identified by the Competition and Markets Authority in a 2016 report, including difficulties for SMEs to open a new business current account.
SMEs still looking for action on Carillion payments
A year on from the collapse of construction services giant Carillion, business owners say not enough has been done to avoid a similar insolvency crisis happening again. Carillion went into administration in January 2018, owing a total of £7 billion. A parliamentary committee found that subcontractors and suppliers were owed around £2 billion by Carillion, which they lost as a result of the liquidation. Business leaders are concerned that the core issues relating to late payment and retentions have still not been addressed.