MEPs hope that new laws to fight the late payments that brought many SMEs and enterpreneurs close to bankruptcy will revive their investment power and generate jobs.

New lifeline for companies stung by late payments

https://api.multimedia.europarl.europa.eu/documents/20125/16425336/v003-0049-en.srt

When a company or a public authority  doesn't pay its bills in time,

it endangers the survival of its suppliers.

Late payments are a cancer  for the economy.

In Europe one bankruptcy in four  is caused by late payments.

Debts owed to companies amounted  to over 300 billion euros in 2012.

Take Jacques Gheysens,  a Belgian entrepreneur.

When he offers his services  to a private or public sector client,

he has to pay for raw materials  and his staff.

after the work is done,  and sometimes six months later.

He therefore has to find the money  to honour his own invoices.

You go to the bank.  You find lines of credit.

You have to say that today banks  are somewhat reluctant to do that.

Borrowing to pay for one's supplies  and employees was the limit.

But that was before  the new European directive in 2011.

MEPs pushed strongly to set  compulsory maximum payment times

The financial difficulties SMEs  are facing must be resolved.

We must help them to invest,  and help them to generate employment.

But this won't be feasible  if they don't receive a stable income.

Since March 2013 all Member States  have had to change their national laws.

Public authorities now have to pay  for the goods and services they procure

within a period of 30 days,  or 60 days in exceptional cases.

Private companies have 60 days  to pay each other for services,

but they're free to decide otherwise  in their contracts.

A new element is that companies will get  a minimum of 40 euros for recovery costs.

Although it's a bit early to see  the effects of this new directive,

no one doubts that companies,  with money freed up from late payments,

will be able to stimulate investments  or simply contribute to their survival.