Lord Jones was hoping to use his visit to win new customers for Urica, a recently launched business factoring company, which he has recently joined as an advisor to help them grow market share and exposure.
During visits to the road markings and lubricants firm RS Clare, Speke-based valve maker Chargepoint Technology and Birkenhead-based shipyard Cammell Laird, Lord Jones will emphasise the difference between Urica’s funding methods and those of traditional invoice discounters.
Urica pays its customers the value of invoices issued to large businesses in return for a fee. Unlike invoice discounting, Urica takes on the risk of late payment and bad debt. The service is designed to address the long-standing problem faced by many SMEs of slow payments by large and powerful customers.
Lord Jones said: “One of the biggest problems small businesses have is cash flow. Late payment is a huge issue. Big firms are good for the money but they phone up and say it’s not 30 days it will be 60 now.
“In the meantime, the small business still has to pay the rent and wages.
“URICA will provide small businesses with what the invoice is worth immediately.”
In return for the cash, Urica charges a fee that ranges between £85 and £250 for a £10,000 invoice.
Lord Jones added: “We pay 100% straight away and use the big business as collateral.
“It amazes me that banks always say they are partners of small firms, but the conditions and terms they put on that lending are so unattractive that small firms don’t bother. Then they have the working capital problem.”
Lord Jones said some of the biggest retail names were among the slowest payers – Sainsbury’s were criticised last year for an “unacceptable” extension to the time it takes to pay its suppliers – but added that large car firms tended to be much better at prompt payment.
Lord Jones added: “The automotive sector has learned a lot from the Japanese about the idea of making the supplier your partner – working with suppliers on quality, delivery and development and of course an element of that is payment.
“That’s one of the reasons that the productivity and quality coming out of Britain’s car factories has gone through the roof.”