Pay in 7 days
Pay in 7 days
In a call to all public bodies at local, national and EU level across Europe to respond to the cash squeeze caused by the COVID-19 crisis, the European Small Business Alliance (ESBA) launched their campaign for a €65 billion boost to small business cash flow by encouraging all public payers to pay their bills within 7 days, rather than 30.
The ‘Pay in 7’ campaign, was launched by the ESBA Board representing one million micro and small companies across the EU. They advocated this cash boost to business to be implemented by all public bodies, to accompany many Member State governments' plans for increased lending already announced.
Taking public procurement procedures as an example, and using the figures provided in the European Semester Thematic Factsheet on Public Procurement 2017:
- Total of public procurement in the EU28 (including spending by utility companies) = 2.3 trillion EUR
- SMEs win 45% of the aggregate contract value above EU thresholds — directly or as joint bidders or subcontractors
- 2.3 trillion EUR x 0.45 = 1.035 trillion EUR for SMEs per year.
1.035 trillion EUR ÷ 365 x 23 = 65.2 billion EUR of extra cash flow for SMEs.
The precedent for this rule was initially proposed in the ESBA Manifesto for Change, published in January 2020, as the “30-day or pay” rule. The increasingly urgent COVID-19 situation in Europe, however, warrants even more stringent measures to ensure small businesses stay afloat.
ESBA have started this petition in support of ‘Pay in 7’ and are asking small businesses and their customers, multi-national companies, political parties, trade unions, charities, and legislators in national and local government to get behind the ‘Pay in 7’ campaign by signing the petition and then posting their support on social media.
This can also be used by private payers who wish to publicise the fact that they also have changed their payment terms and now support ‘Pay in 7’.