Recruiters should not be treated as “extended overdraft facilities”, according to Beatrice Bartlay, founder and managing director of multi-sector recruiter 2B Interface.

Bartlay says: “Cash is king in today’s economy. Positive cashflow is vital for small businesses, which do not have vast resources to fall back on. SMEs should not be treated as extended overdraft facilities for the public sector. So the news that 80% of prime contractors will be paid within five working days and that all contractors will have to pay their suppliers within 30 days should be music to the ears of the sector.”

This week the government committed to continue the Enterprise Finance Guarantee (EFG) for the next four years, making around £2bn available to viable small companies without a credit history or collateral, offering support to 6,000 SMEs a year.  

The government also announced plans to invest £200m in Enterprise Capital Funds supporting equity investments in the highest growth potential businesses over four years. To encourage ‘business angel’ investments, the government is also putting in place a framework linking business angels with the government’s SME investment arm, Capital for Enterprise, for a co-investment funds as part of the Regional Growth Fund to help angel investments into high growth potential early stage SMEs, particularly in areas worst affected by public spending cuts.