Within the U.K., small businesses are suffering from longer and longer payment terms imposed upon them by their large corporate buyers. It’s an issue that has forced lawmakers to impose new regulations on domestic buyers, requiring them to make public their practices regarding invoice settlement.
The situation for U.K. SMEs sourcing products from overseas, however, could be a bit easier. Scottish Pacific Business Finance revealed Thursday (April 2) that it has opened its doors in the U.K. to begin offering supply chain financing to small businesses. The new location marks an expansion from its current markets in Australia, New Zealand and China, reports said.
Scottish Pacific Tradeline, which will operate as a subsidiary of Scottish Pacific, will provide working capital to U.K. businesses of up to $383 million and will initially focus on businesses doing international trade.
Part of Scottish Pacific’s decision to move into the U.K. is from its ongoing operations in China, the firm’s chief executive officer Peter Langham said. “Through our China office we have established relationships with a number of Chinese manufacturers who have been able to upscale their businesses using the Tradeline product,” the executive said in a statement. “The U.K. market is three times the size of Australia, and with our operation in London, we are in a strong position to capitalize on the demand from growing businesses looking to fund their overseas purchases.”
Scottish Pacific has chosen supply chain finance veteran Ed Bracey to lead the U.K. expansion, the company revealed.
There is certainly a gap to fill to provide capital to small businesses in the U.K. considering the issue of late payments, but Scottish Pacific’s existing markets are some of the world’s strongest for small business financing. According to a recent report, China holds the lead position among Asian SME lenders, though key jurisdictions in the region are not too far behind. In Australia, for example, lender CIMB is reportedly looking to open a small business finance unit by 2018.