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What's the most a small business can charge as a late fee for services rendering?

I would for a small, family-owned stone installation company. I wanted to make up a customer agreement form that lays out the services, payment stipulations, etc. One of the things I wanted to add was a late fee that would be added to the net invoice. But, I don't know what percentage I can charge a customer if they're late with the final payment, the timeframe, etc.

4 replies

Nov 9, 2020

Maine's Prompt Payment Act provides for penalty interest of 1% per month. Be aware that to the extent that the work is performed in connection with a residential project, you may fall under Maine's Home Construction Contract Act.

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Dec 1, 2020

In addition to what Joe said, here are some other considerations for you.

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Dec 1, 2020

First, the contract needs to detail when interest will begin to accrue, how it will accrue, and the interest rate that will apply. For example: “A finance charge of 1.5% per month will accrue on all balances over 30 days past due.” It is not enough to put your interest rate on your invoice. You must have it agreed to, in advance, by your customer. Second, the type of transaction matters. If your customer is a business, you still need a contract, but you can add interest within reason to all transactions. If your customer is a consumer, you are governed by Title 9-A, Maine Consumer Credit Code, which limits the amount of interest you can charge, as follows: 1. With respect to a consumer credit sale, other than a sale pursuant to open-end credit, a seller may contract for and receive a finance charge not exceeding that permitted by this section. 2. The finance charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of either of the following: A. The total of: (i) 30% per year on that part of the unpaid balances of the amount financed that is $1,000 or less; (ii) 21% per year on that part of the unpaid balances of the amount financed that is more than $1,000 but does not exceed $2,800; and (iii) 15% per year on that part of the unpaid balances of the amount financed that is more than $2,800; or B. 18% per year on the unpaid balances of the amount financed. 10 M.R.S. § 2-201. Generally, 18% a year (1.5% a month) is the most acceptable and commonly used rate.

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Sep 15, 2022

Late fees for services rendering are 15% of the amount of time overdue, up to a maximum of $50 and also if you're looking for fast and nursing assignment help which you can get from <a href="https://my-assignment.help/nursing-assignment-help/">https://my-assignment.help/nursing-assignment-help/</a> site. For example, if a service is rendered ninety days late, the late fee will be $150.

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