A finance initiative to bail out small firms facing cash-flow crises after is to open a Birmingham office backed by Lord Digby Jones.
The former CBI director-general is acting as ambassador to URICA, a London-based organisation set up to help SMEs increasingly at the mercy of major companies in the supply chain.
Lord Jones told the Post: “URICA is there to help small businesses who face issues with big companies who turn around and say “we have just made 60 days for payment to 90 overnight.”
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“In such cases small businesses know they are going to get paid, it is not a bad debt, but nevertheless it impacts on small businesses’ cash-flow. URICA will give you the cash right now.”
Lord Jones said URICA could play a vital role in helping Britain’s recovery.
“The economy of Britain is going to carry on growing and that depends on small business succeeding,” he said.
“We need big business, the likes of JLR, JCB, Triumph, but 93 per cent of businesses employ fewer than 30 people. That is a huge contribution to GDP.”
He said URICA could help by banks in recent years.
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“There is a company in the North West and they were told their local bank branch was closing and they were contacted by a man from Swansea who said ‘I am your new relationship manager.’ URICA say ‘we are on your side.’
“I am passionate about business to succeed. But I hear small businesses say ‘we have just sent a load of kit to big business and they suddenly say we are going to pay you in 60 days, not 30.’
“But you still have to pay the wages, you still have to pay the rent. If the banks will not lend, we are saying we will lend to you. It is a financial go-between.
“We charge interest but we only charge what the banks would charge. It took a year to get it all in place and we launched it a year ago. The more small businesses that use it, the better. It is an increasing problem, and it is increasing at a time when we have a growing economy. It becomes a bigger problem then, it is more of a problem today that it was a year ago.
“I am getting loads of small businesses contact me to say they have just put us on 60 days rather than 30 days.
“We are not in the game of charging big commercial fees, we know they are good for their money. We charge a rate of interest, it is a bank in all but name. When you have a big company, you know that you are going to get paid.
“We are the answer to ‘when?’. We have helped hundreds of firms. It is not a social service, it is not a charity, but we are trying to solve issues for small businesses.”
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Lord Jones said his role was as an adviser to URICA. “I am an ambassador for them. . There is a workforce of 20 based in London.
“As this begins to get larger, we will open offices in Birmingham, Manchester, Leeds and Newcastle.”
Lord Jones said URICA had been founded by financial grandee Lindsay Whitelaw, who previously launched one of the city’s most respected fund managers, Artemis.
“It’s his money, it’s his vision and my mouth. I am investing my time.”