Interest Rate Rise Could Help SMEs Tackle Late Payments

Interest Rate Rise Could Help SMEs Tackle Late Payments | My Debt Recovery

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The Bank of England’s decision to increase the interest rate could be good news for SMEs tackle late payments. The higher rate will make it more expensive for companies to delay settling their debts, and may encourage them to pay up sooner. This could be a welcome relief for SMEs who are often struggling to get paid on time.

The increase in the Bank of England base rate over the last few months from 0.25% to 0.75% might make companies think twice about delaying payments, and could lead to increased debt recovery rates for SMEs. Debt recovery can be a difficult process, but with the help of an experienced debt collection agency, you can improve your chances of getting the money you’re owed.

Will I Benefit?

It all ties back to legislation that most firms are familiar with, but seldom apply, the Late Payment of Commercial Debts (Interest) Act. This legislation allows businesses to charge their clients compensation and statutory interest on any overdue invoices in order to assist cover debt collection expenses.

You are able to charge 8% interest plus the Bank of England Base Rate from the day the debt becomes overdue. In addition, you can also claim debt collection costs of at least £40, depending on your invoice’s value.

As a result, any interest rate rise can benefit SMEs as it gives them extra leverage when chasing late payments. As well as giving debtors more reason to pay their overdue bills on time!

While this is not a major jump, it may be a hand up in pursuing overdue bills at a time when small and medium-sized businesses are being severely impacted by delayed payments and cash flow problems.

Will The Interest Rate Continue To Rise?

This is the first interest rate rise in over a decade, and it’s likely that there will be more to come. The Bank of England has said that it expects rates to rise gradually over the next few years, as inflation starts to pick up.

This is good news for small businesses who are struggling to get paid on time, as the higher interest rate will make it more expensive for companies to delay settling their debts.

This could encourage them to pay up sooner, and may lead to increased debt recovery rates for SMEs. Debt recovery can be a difficult process, but with the help of an experienced debt collection agency, you can improve your chances of getting the money you’re owed.

Ignore Late Payments Won’t Pay Themselves!

With the higher interest rates in place, it’s time to take action and get back what is rightly due to you. We can help SMEs tackle late payments, discover how much interest and compensation you can charge and what action is best to take for your circumstances by dropping us a line today.

Since 2009, we have recovered funds for over 1,000 clients, both in the UK and worldwide. Due to our professionalism and how we handle cases, My Debt Recovery now has a number of clients who were originally debtors that we collected monies from. Our work covers all business sectors and we work on behalf of solicitors, accountants, surgeons, funeral directors and many other business owners.

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