Sapna says.“ When large buyers delay settlement, liquidity pressure is transferred to smaller suppliers that typically have limited cash buffers, allowing stress to accumulate and spread through supplier networks.
“ Enforced payment limits, such as a 60‐day cap, would be expected to reduce short‐term credit stress and lower the risk of otherwise viable suppliers failing due to liquidity strain rather than underlying demand weakness. By easing financial pressure at the SME tier, faster payment practices also reduce the likelihood of supply‐chain disruption driven by supplier distress rather than operational or geopolitical shocks.”
Her colleague, Vitaliano Tobruk, Supply Chains Industry Practice Lead at Moody’ s Analytics, added that while large firms may experience near-term working-capital adjustments, the longterm benefits outweigh this:“ Mandatory payment rules represent a significant shift in how supply chains operate. Faster and more predictable payment practices are expected to ease cash‐flow pressure on smaller suppliers, which typically operate on thin margins and are most exposed to liquidity risk, supporting greater overall resilience.
“ While larger firms may experience some near‐term working‐capital adjustment, the longer‐term benefit is a more stable and sustainable supplier base.
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