Gateshead Council pay more than £13m early to support local, small businesses

Gateshead Council's FreePay Programme has accelerated vital funds into the local economy to support small suppliers with their cash flow and boost growth.

Eligible, small, local, suppliers are automatically enrolled into the FreePay programme. FreePay enables Gateshead Council to pay these suppliers early without charge, supporting business growth and delivering social value.

Over 10,000 invoices have been paid early for free by Gateshead since the scheme's launch and over 300 suppliers are now registered on the FreePay programme. Payments are made faster than the contracted time, reducing the need for suppliers to spend additional time on invoice collection.

Faster payment for free helps suppliers with their cash flow and can reduce reliance on loans or overdraft facilities, this has a significant impact particularly as the cost of borrowing is currently high. The scheme can be a lifeline at a time when the cost-of-living crisis is having a huge impact on local businesses and their employees.

It is estimated that 20% of small businesses have run in to cash flow problems due to late payments. Getting paid as early as possible provides significant benefits for both large and small companies and can make a substantial impact on the growth and development of businesses.

Councillor Leigh Kirton, Cabinet Member for Economy and Communications said: "We know how vital cash flow is for our local businesses, especially the small and micro suppliers who are the backbone of our economy. Through our FreePay Programme, we've been able to accelerate over £13 million into the local economy, helping more than 300 suppliers get paid faster and without charge. This isn't just about quicker payments - it's about supporting jobs, reducing financial stress, and helping Gateshead businesses grow. By also offering the Supplier Incentive Programme to larger firms, we're reinvesting in essential services while ensuring all our suppliers benefit from early payment. It's a win-win for Gateshead."

Larger businesses are eligible to join the Council's Supplier Incentive Programme. The programme, which is provided by Oxygen Finance, applies a small, pre-agreed, rebate based on how quickly the payment is accelerated. The programme provides the council with additional funding to reinvest back into delivering essential local services. It is quick and easy for suppliers to join with no invoice factoring or need for credit checks