Restrictions lifted on invoice finance
From early next year, businesses will be freed from restrictive clauses in contracts that prevent them from gaining invoice finance, in a move aimed at providing more funding opportunities for small businesses.
Around 44,000 businesses receive over £19 billion of funding via invoice finance at any one time, according to the Asset Based Finance Association, which represents the invoice finance industry in the UK. However, the size of the market is limited by clauses designed to prevent a supplier from sub-contracting work. So clauses that have the unintentional consequence of blocking invoice finance arrangements will be nullified, while a customer’s right to prevent traditional sub-contracting arrangements will be retained.
Small Business Minister, Anna Soubry, says: “Small businesses are the economic backbone of Britain and we will do everything possible to make sure they continue to grow and create jobs. By scrapping restrictions on invoice finance, thousands of firms across the country could benefit from faster access to hard-fought funds.”