Initiative law on payment terms for large companies

For large companies, a payment term of a maximum of sixty days should apply to pay invoices from their SME suppliers. That is the gist of an initiative law submitted by Agnes Mulder -CDA- and Jacques Monach -PvdA-. Currently, a payment term of more than sixty days is permitted provided both parties expressly agree. Due to the difference in negotiating power between large companies and SMEs, small entrepreneurs often agree. This not only causes financial problems, but the payment arrears also damage the economy. Moreover, there is a snowball effect because these small suppliers in turn try to persuade their suppliers to longer payment terms. This is being remedied with this initiative law.