Seven in 10 small businesses in the UK have faced legal costs as a result of commercial disputes, amounting to a crippling £11.6 billion per year according to data from the Federation of Small Businesses.
With 5.7m SMEs in the UK in 2018, it would mean around 3.9m of them have been involved in legal action in some kind of dispute in the last year according to calculations by the Chartered Institute of Arbitrators (CIArb). The legal costs were reported to the Federation of Small Businesses and relate to the period between 2010 and 2015. One of the most common disputes relates to late payments.
The CIArb study found that 40% of SMEs had to escalate issues to legal action against other parties, while 29% said they had been the subject of proceedings instigated by another company. Unsurprisingly, more than four in five company managers say they look to resolve disputes before they reach the level where litigation becomes necessary.
It is possible to go to arbitration to resolve disputes, which could be significantly cheaper than a long-winded legal dispute, and the CIArb has more information on this on its website.
However, there is another choice. If your company uses an invoice financing firm, then not only will you receive your money within a much shorter timeframe, but since your invoice is then owned by the invoice financer, any litigation issues will be resolved by the finance provider.
There is a fee involved in financing your invoices, but it means you will never have to worry about litigation in the single biggest area that SMEs face these issues. It means you have more time to take care of what you are best at, running your business.
To find out more about invoice financing, contact Muse at firstname.lastname@example.org or via this link.