In the past years, SMEs have faced several challenges, including the global pandemic, high inflation, supply chain disruption, skills shortages, and increasing regulatory burden.

Through the SME Relief Package, the European Commission introduces a Regulation on combating Late Payments. This regulation revises a current Directive setting binding maximum payment terms at 30 days for public authorities and business-to-business transactions. It will also make the payment of compensatory fees and interest legally automatic in case of late payment. The Commission believes this will help SMEs improve their cash flow.

Commenting on the new regulation concerning the Late Payments Regulation, MBB CEO Joe Tanti stated that; ‘’a culture of on time payment is essential, and shorter payment terms in business-to-business transactions helps the liquidity of SMEs. However, the law should also preserve freedom of contract and provide the flexibility for businesses to agree on bilateral terms according to their own circumstances.”

The European Commission in its package also plans to create an enabling business environment by reducing the regulatory burden for SMEs and simplifying administrative procedures, together with reporting requirements. It also proposes to strengthen the SME test, to appoint an EU SME Envoy, and improve access to finance for SMEs by increasing the financing guarantee under the InvestEU programme. It will also provide specific tools to help SMEs develop sustainable competitiveness skills such as apprenticeships and training schemes.

“The SME Relief Package is a positive step in the right direction but more needs to be done to support SMEs. The EU needs to build on this package by ensuring that financial support reaches SMEs, avoids introducing new regulatory burdens, increase access to markets and invest in skills and training. By taking these steps, the EU can effectively help SMEs continue to recover from the current global economic challenges,” Mr. Tanti concluded.

For further information on the SME Relief Package, please contact the Malta Business Bureau on infobrussels@mbb.org.mt .

The Malta Business Bureau is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association. It is also a partner of the Enterprise Europe Network.