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New measures to boost funding for small businesses announced

18/09/2018 / Comments 0

Government scraps ban on invoice finance for SMEs

New government plans to improve small business access to invoice finance have been announced.

Under new laws scheduled to take effect from the start of 2019, restrictions on invoice finance will be scrapped in a move that is hoped will reduce the impact of late payment on small businesses and help them to secure funding to boost their cash flow.

What’s changing?

It has been well documented how many of the UK’s big companies are imposing long credit terms on their suppliers and delaying payment of their invoices, which is putting pressure on the cash flows of small businesses.

To compound their woes, many large companies also insist in their contracts that small suppliers do not use invoice financing, which is restricting their access to funding to overcome these challenges.

However, under new government plans to crack Britain’s late payments culture, this will be banned, allowing small companies to borrow against unpaid invoices from large customers and bridge the cash flow gap between paying suppliers and getting paid.

Invoice finance releases up to 90% of an invoice’s value within 24 hours, allowing businesses to free up the cash that’s essential to fulfilling new orders, meeting day-to-day commitments and securing early settlement discounts with suppliers.

And when the customer pays, the remaining balance of the invoice is made available minus a service fee.

Read more about invoice finance

Better late than never

The new laws, which form part of the government’s modern Industrial Strategy, will allow more companies to unlock the cash tied up in their sales ledger, cash which is vital to the success of their business, building an environment in which small businesses can thrive.

The first iteration of these regulations was published back in December 2014. However, the plans were seen as flawed and needed to be rethought.

Then, last September The Business Contract Terms (Assignment of Receivables) Regulations 2017 was published but it was withdrawn because it was believed to still require further work.

Now, the new legal changes which are set out in the draft Business Contract Terms (Assignment of Receivables) Regulations 2018 are hoped to take effect from the start of 2019.

Under the new proposed laws, any contractual restrictions entered into after 31 December 2018, with certain exceptions, would have no effect and could be disregarded by small businesses and finance providers, which will help stop larger businesses from abusing their market position.

The new measures are expected to provide a long-term boost to the UK economy estimated to be worth almost £1bn.

As the UK’s leading independent invoice finance broker we could help your business secure the most suitable funding solution for your needs. Contact our expert team today on 0800 9774833 or info@hiltonbaird.co.uk to see if you could benefit from invoice finance.

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Some of the funders we work with

  • Catalyst Finance
  • Regency Factors
  • Lloyds Bank Commercial Finance
  • Team Factors
  • Santander Corporate & Commercial
  • Market Invoice
  • ABN AMRO Commercial Finance
  • Creative Capital
  • Trade Finance Partners
  • Barclays
  • Shawbrook Business Credit
  • Investec
  • Davenham Trade Finance
  • Secure Trust Bank
  • Close Brothers Invoice Finance
  • Aldermore Invoice Finance
  • Innovation Finance
  • Nucleus Commercial Finance
  • Leumi ABL
  • Ultimate Finance Group
  • Roma Finance
  • Asset Advantage
  • Positive Cashflow Finance
  • Partnership Invoice Finance
  • IGF Invoice Finance
  • Haydock Finance Ltd
  • 4Syte
  • iwoca
  • Woodsford Tradebridge
  • Giant
  • PNC Business Credit
  • Spotcap
  • Pulse Cashflow Finance
  • Calverton Finance
  • Bibby Financial Services
  • Skipton Business Finance
  • InvoCap
  • Merchant Money
  • Metro Bank SME Finance
  • Royal Bank of Scotland
  • 1pm
  • GapCap Cashflow Finance
  • Boost Capital
  • Davenham Asset Finance

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