Government set to relax invoice finance rules early next year
12th August 2015 | News
Changes to invoice finance regulations will unlock new funding opportunities for the UK’s small businesses, as the Government seeks to scrap restrictive clauses in contracts in early 2016.
More than 44,000 firms receive over £19 billion of funding through invoice finance at any one time, according to the Asset Based Finance Association, which represents the British invoice finance industry.
It’s thought the impending scrapping of the restrictive clauses will specifically benefit SMEs.
Jeff Longhurst, CEO, Asset Based Finance Association, said: “This is good news for UK businesses. As government recognises, invoice finance is a key source of funding for SMEs in particular, and taking effective action against bans on the assignment of invoices will allow more businesses to unlock the funding tied up in their unpaid invoices.
“Bans on assignment are often imposed by large companies on their smaller suppliers. With the work being done on late payment and now on bans on assignment, government has shown it is committed to addressing poor payment practices and getting a fairer deal for small businesses.
“It is a complex area and we look forward to seeing the detailed regulations, but the government must be congratulated for the focus on this important area.”
Anna Soubry, Small Business Minister, has publicly backed the invoice finance move, giving ambitious small business owners the opportunity to obtain finance more quickly and underpin organic growth.
“Small businesses are the economic backbone of Britain and we will do everything possible to make sure they continue to grow and create jobs,” said Soubry.
“By scrapping restrictions on invoice finance, thousands of firms across the country could benefit from faster access to hard-fought funds.
“While invoice finance may not be right for everyone and is absolutely no excuse for late payment, I want small businesses to have the option of using it to increase their cash flow.
“This is all part of our plan to maintain the UK’s position as the best place in Europe to start and grow a business.”