By Claire West
Lovetts Plc, one of the UK’s leading law firms specialising in commercial debt recovery has welcomed the Government’s Green Paper designed to address the lending crisis to small firms. The firm saw late payment demands to secure outstanding debt rise by almost a quarter (24.6%) year on year in the first half of 2010.
Charles Wilson, Chairman and Managing Director of Lovetts said: “The rise in late payment demands point to the fact that many businesses are still very much under financial stress. All too often it’s a case of can’t pay, won’t pay — and this causes a vicious circle from which many SMEs are struggling to escape".
“At the root of this is a basic lack of funding available to give businesses the lifeline they need in such challenging trading conditions. The Green paper clearly won’t be popular with the banks but small businesses are the engine room of the economy — if we fail them we could face a double dip recession".
“In the meantime the SMEs need to remain tough on late payers through the use of late payment demands and if necessary the threat of a legal claim. This will help ensure that when the cheques get issued or BACs payments authorised, they are at the top of the list.”
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