The pressure is mounting on companies and big corporations that are failing to pay small business owners in a timely fashion to pay up or be named and shamed.

Currently, many big businesses are delaying payment of contractors and small business owners by up to 60 or 90 days. Instead of paying promptly they are providing access to supply chain finance to small business owners who want faster payment. This reverse factoring is costing small business owners millions and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell wants it stopped.

In a move that has to please the Ombudsman, Greensill Capital has announced it will stop providing its supply chain finance services to big companies that do not offer fair payment terms.

The announcement comes following the release of ASBFEO’s Supply Chain Financing Position Paper, which provides a suite of draft recommendations to be finalised before a full report is handed down at the end of March 2020.

“We are delighted to see that Greensill Capital will no longer provide their product to businesses with poor payment terms, that is, in excess of 30 days,” Carnell said.

“A key recommendation of our position paper is that all businesses, regardless of their size, should be paid within 30 days. Where payment terms are 30 days or less, supply chain finance should be available to those small businesses that want to be paid faster. “We have a real problem when large businesses extend their payment terms from 30 days to 60, or even 90 days, and then offer a supply chain financing product to those small business suppliers who are forced to take a haircut to get paid on time.

Carnell said the announcement by Greensill makes it clear that business owners deserve a better deal from the big end of town.

“It is great to see businesses like Greensill Capital, along with Telstra and Rio Tinto, show corporate leadership on this issue. We will continue to monitor Australia’s other corporate players and encourage them to follow the leadership of these companies,” Carnell concluded.