LONDON Oct 23 The government said on Tuesday
some of Britain's biggest companies may adopt a scheme to help
suppliers access cheaper borrowing.
Small businesses have been hit particularly hard as banks,
facing higher capital requirements, rein in lending.
Various government schemes to improve the availability of
financing have so far done little to boost the economy.
The supply chain finance scheme, already used by Rolls Royce
and Vodafone, involves large companies notifying
a supplier's bank that an invoice has been approved for payment.
The supplier can then borrow against that invoice at a lower
rate that it might otherwise have been able to achieve.
John Walker, the national chairman of the Federation of
Small Businesses, said the scheme could help make available
working capital and tackle the problem of late payment.
"Nearly three quarters of small businesses report that they
have been paid late in the past year, placing a huge strain on
cash-flow and meaning they struggle to realise ambitions to
grow," he said.
The government said that 36 other companies, including
Britain's biggest retailer Tesco, fixed-line telecoms
firm BT and pharmaceutical company GlaxoSmithKline
, had agreed to consider taking part in supply chain
Companies could deliver as much as 20 billion pounds in
cheaper finance to their suppliers, a calculation the government
said was based on the amount of credit between the interested
companies and their suppliers at any one time.