The Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, has welcomed the news that Greensill Capital will stop providing its supply chain finance services to big companies that do not offer fair payment terms.
The announcement comes immediately 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,” Ms Carnell says.
“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.
“Today’s announcement by Greensill Capital makes it clear that supply chain financing businesses won’t be used as a whipping boy for the appalling treatment of small business by large businesses.
“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.”
Press release: Greensill backs fair payment terms