Rules designed to prevent struggling companies from becoming insolvent came into force yesterday (15 September), to warm applause from small firms.
Under the changes, government departments will no longer automatically be first to recover debts from insolvent companies, allowing SME creditors a chance to claim owings back quickly.
Stephen Alambritis at the Federation of Small Businesses (FSB) said the new rules would help small firms on both sides of the problem - those that are threatened with insolvency and their suppliers who are often left out of pocket.
"The FSB lobbied hard for the abolition of Crown Preference and we are delighted that the government has acted to ensure that small businesses get access to money they're owed," he said.
"The new proposals will also play a key role in providing a rescue package for those small firms that find themselves in financial difficulty."
