TSB has today announced it will ensure that all of its smallest suppliers will be paid within just 10 days of invoicing the bank.
The move will apply to all companies that supply goods and services to the bank, even if the contract allows it to pay over a longer period.
While TSB is already one of the leading financial services businesses for prompt payment, the move is designed to provide cash flow certainty for small suppliers. TSB has also pledged to write a 30 day guarantee into all supplier contracts going forward, as a further commitment to the UK businesses it works with in the future. Where possible, the bank will seek to pay suppliers even sooner than the 30 day period.
Alongside ensuring prompt payment TSB is reaching out to all small suppliers to discuss specific challenges they face.
This comes on the back of TSB offering to support its 100,000 business customers with a package of measures and the reassurance of being the only bank to offer a Lending Pledge if businesses get into distress. The pledge was developed in 2019 in conjunction with stakeholders including Federation of Small Business and the APPG on Fair Business Banking:
• Be fair and transparent in everything we do, keeping the customer informed as to the course of action we are taking and why.
• Give customers reasonable time to return their business to health.
• Not raise loan margins on existing facilities if a business enters into financial difficulty.
• Not default a business if it is up to date on its loan payments, but a valuation change impacts a covenant.
• Not demand full repayment or remove an overdraft unless a business has breached our terms of lending.
• Not run their business support unit as a profit centre and will not incentivise their Partners for additional income earnt on accounts in business support.
Robin Bulloch, Customer Banking Director, TSB, said: “Small businesses are the backbone of the British economy and it’s vitally important at this time that we not only look after our business customers, but also our supplier partners. By speeding up how we pay suppliers they can maintain income and cash flow allowing them to focus on helping us serve TSB customers even better.”
One of the suppliers that will benefit from this new pledge is employee wellbeing service, IPRS Health, a long-term supplier of physiotherapy, mental health, ergonomic solutions and workplace equipment to TSB across its UK offices.
Krishna Naidu, Head of Client Relations, IPRS Health, said: “This important pledge gives our business increased confidence and more certainty in its cash flow during these difficult times. This approach goes a long way for SMEs like ours who need this type of reassurance as businesses face uncertainty during these exceptional circumstances - so it’s great that TSB is helping its key suppliers. In this fast changing environment it is vital that we are able to continue to provide the service of supporting our customer’s employees across the country with both their physical and mental health and we hope that more companies follow TSB’s welcome lead so we in turn can look to do the same for the significant number of trusted partner SMEs across the UK that rely on us.”
Emma Jones, Founder of Enterprise Nation said: “TSB paying its smallest suppliers within 10 days during this period is a great move, helping these businesses with their cashflow at a difficult time. Access to cash via clients paying for work carried out has to be a first port of call for small businesses, and I would like to see this leadership shown by TSB to be followed by other large organisations with small suppliers on their books. Doing so will keep money flowing in an hour of need.”