Wonga.com announced this week that they will lend up to £10,000 to businesses. The firm has been heavily criticised for lending to individuals at an APR of 4,214%, but claims business loans will be at rates starting at 17% APR.
The shadow business secretary, Chuka Umunna, criticised the government for failing to get banks to lend more to small- and medium-sized enterprises (SMEs). “That SMEs are being driven into the hands of Wonga is a damning indictment of the government’s failure to get finance to successful SMEs,” he said. But he is missing the point.
Anil Stocker, founder of the online financing firm MarketInvoice, expressed dismay at Wonga’s entry into the market. “We were shocked when figures from the Small Business Finance Monitor appeared suggesting as many as 26% of businesses were funding their working-capital needs from credit cards. Turning to Wonga-style, extremely expensive loans would be even more irresponsible,” he said.
There is a simple alternative
But this is an unnecessarily painful way of solving a problem which is really pretty easy to fix. WE ALL NEED TO PAY OUR BILLS ON TIME. Why wait? The money is sitting in your bank account earning 0.000001% interest or less, so little benefit to you. So reduce your liabilities and pay the bills. Even better, you are taking is away from the banks who are earning interest on it. So there is a feel good (or fcuk you factor).
Large businesses are the worst culprits. In fact it is disgraceful the way that large businesses treat smaller business. It is corporate bullying, as I laid out in a recent blog Corporates: stop bullying and pay your bills on time. You are killing small businessess. Big businesses have terms of 30, 60 or even 90 days and still need to be chased constantly.
But there is a responsibility on the suppliers to get invoices out on time and accurate, so it is easy to pay it. Here are 5 steps to a perfect invoice
- Get the invoice out within a 2 days of finishing the work
- Make sure the invoice is correct and matches the quote or delivery
- Make sure that the invoice has your Invoice Number and any client reference
- Ensure that it has instructions on how to pay you
- Send it as a PDF (not an MSWord file) via email rather than post it
You need to store and track your invoices to understand who are late payers so you never work with them again. This is where LessAdmin.com comes in
FREE STUFF for creating electronic invoices
- If you haven’t got a decent looking electronic invoice you can download one here which is MSWord format
- If you haven’t got MSWord on your PC then you can download a free compatible application called Jarte
- If you haven’t got a way of creating a PDF on your PC then there is a free program callled PrimoPDF
And you can register as a supplier for LessAdmin.com to be one of our launch customers, with the added benefit of an entry in The Directory.