Payment period of large firms to SMEs reduced to 30 days

The maximum statutory payment term of large companies to small and medium-sized enterprises (SMEs) will be shortened to 30 days. This will halve the current allowed payment period and make it equal to the payment period of the government. This is stated in the bill that State Secretary Mona Keijzer (Economic Affairs and Climate Change), partly on behalf of Minister Sander Dekker (Legal Protection), sent to the House of Representatives on March 16, 2021. The legislation will help to mitigate a €55 billion funding gap to the detriment of SMEs if 'just pay on time' becomes the norm. With this new bill, the government wants to protect SMEs better.

Unfair force field

Figures from early last year show that 11% of SME entrepreneurs accepted a longer payment term than they felt comfortable with. This concerns 50,000 SMEs. The current economic situation has further reinforced the dependence of SMEs on large companies.

Unnecessary financing deficit of 55 billion

A shortage of working capital is one of the biggest reasons for financing needs in SMEs. This is the capital that the entrepreneur uses to finance his production until the moment that related income comes in. This shortage accounts for no less than 21% of the financing requirement, according to the 'Financing Monitor 2019' of the CBS.

Independent supervision

Last January, at the request of the Ministry of Economic Affairs, the Netherlands Authority for the Consumer & Market (ACM) opened a temporary hotline to gain insight into the payment behavior of large companies to SMEs. The ACM collects reports on large companies that exceed the statutory or agreed payment terms. The results provide insight into the extent of the problem and clarify whether the problems are concentrated in certain sectors. The Ministry of Economic Affairs and Climate Change will evaluate the results after one year to determine whether independent supervision should be instituted in addition to the legislative amendment to change the maximum permitted payment period.

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