Helping Newcastle’s SMEs tackle rising costs
With rising costs, many small and micro businesses struggle to maintain cash-flow. FreePay enables Newcastle City Council to pay small and micro suppliers early without charge, supporting business growth and delivering social value through job creation. Eligible suppliers are automatically enrolled into the FreePay programme.
Over £21m in vital payments and over 14,000 invoices have been paid early for free by Newcastle since the scheme’s launch and over 300 suppliers are now registered on the FreePay programme. Payments are made in less than half the contracted time and over the last 3 months this has averaged 8.5 days.
Cllr Paul Frew, Newcastle City Council cabinet member for Resources and Cabinet Secretary said: “As a council, one of our key priorities is supporting people through the cost-of-living crisis. This support extends to our local suppliers, ensuring that through our FreePay programme they receive accelerated payments, getting much-needed cash quickly during these difficult times.
“We’re proud to offer this service to support our local business community.”
Taking on the UK’s biggest cause of business failure
Faster payment for free helps suppliers with their cash flow and can reduce reliance on loans or overdraft facilities, at a time when the cost-of-living crisis is having a huge impact on local businesses and their employees.
It has been estimated that late payment leads to 50,000 firms a year failing across the UK. Getting paid as early as possible provides significant benefits for both large and small companies and can make a substantial impact on the growth and development of businesses.
Larger businesses are eligible to join the council’s Supplier Incentive Programme. The programme applies a small, pre-agreed, rebate based on how quickly the payment is accelerated. The programme provides the council with additional funding to reinvest back into delivering essential local services.
