Larger clients are forcing SMEs, contractors and freelancers to accept new credit terms, according to Touch Financial. The invoice finance broker recently surveyed more than 200 small businesses and found that more than 50% have had their credit terms amended in the past 12 months.
A massive 89% of those affected felt they had no option but to accept the changes even though most of them said they were imposed midway through a contract period. Although suppliers are within their rights to refuse to accept such changes, the majority of them are clearly worried that a refusal will lead to them losing that customer.
4 out of 10 of the firms surveyed feel that the future growth of their business is in jeopardy due to changed terms. Simon Carter from Touch Financial remarked that it cannot be right for larger entities to force changes in terms and conditions without any form of negotiation especially after a contract has been signed.
Many small businesses are still struggling to recover from the credit crunch and with cash flow tight; delaying invoice settlement for whatever reason has to be bad news. But companies actually changing terms mid-stream seem to be extremely callous.
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