{"id":60200,"date":"2015-08-10T12:37:00","date_gmt":"2015-08-10T12:37:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=2f255574c8e8815337ab22ac4ad19830"},"modified":"2015-08-10T12:37:00","modified_gmt":"2015-08-10T12:37:00","slug":"press-release-restrictions-lifted-on-invoice-finance-to-help-small-firms-grow","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=60200","title":{"rendered":"Press release: Restrictions lifted on invoice finance to help small firms grow"},"content":{"rendered":"<div class=\"govspeak\">\n<ul>\n<li>this will help more small firms secure finance against money owed to them in invoices<\/li>\n<li>easier access to finance will speed up economic growth and create jobs for people<\/li>\n<\/ul>\n<p>Businesses will be freed from restrictive clauses in contracts that prevent them from gaining invoice finance when new measures come into force early next year. The move will open up more funding opportunities and specifically benefit small businesses. <\/p>\n<p>Invoice finance allows businesses to apply for finance using invoices for money owed to them as security. This means that, in some instances, they can get money faster than if they waited for their customers to pay them. <\/p>\n<p>More than 44,000 businesses receive over \u00a319 billion of funding this way at any one time, according to the Asset Based Finance Association, which represents the invoice finance industry in the <abbr title=\"United Kingdom\">UK<\/abbr>. <\/p>\n<p>But the size of the market is limited by clauses designed to prevent a supplier from sub-contracting work. <\/p>\n<p>These clauses have the unintentional consequence of blocking invoice finance arrangements and will be nullified, while retaining a customer\u2019s right to prevent traditional sub-contracting arrangements.<\/p>\n<p>Small Business Minister Anna Soubry said:<\/p>\n<blockquote>\n<p>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.<\/p>\n<p class=\"last-child\">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 cashflow. This is all part of our plan to maintain the <abbr title=\"United Kingdom\">UK<\/abbr>\u2019s position as the best place in Europe to start and grow a business.<\/p>\n<\/blockquote>\n<p>Jeff Longhurst, Chief Executive Officer of the Asset Based Finance Association, said:<\/p>\n<blockquote>\n<p>This is good news for <abbr title=\"United Kingdom\">UK<\/abbr> businesses. As government recognises, invoice finance is a key source of funding for <abbr title=\"small and medium-sized enterprises\">SMEs<\/abbr> 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.<\/p>\n<p class=\"last-child\">Bans on assignment are often imposed by large companies on their smaller suppliers. With the work being done on late payment and now on ban on assignment, government has shown it is committed to addressing poor payment practices and getting a fairer deal for smaller 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.<\/p>\n<\/blockquote>\n<p>John Allan, National Chairman of the Federation of Small Businesses, said:<\/p>\n<blockquote>\n<p>The decision to outlaw the ban on terms in contracts to prevent businesses from choosing who they want to go to for invoice financing is overwhelmingly positive for businesses around the country. It\u2019s something the <abbr title=\"Federation of Small Businesses\">FSB<\/abbr> has been calling for and will empower businesses to take more control over their finances. Access to finance can be very challenging for small firms. Recent <abbr title=\"Federation of Small Businesses\">FSB<\/abbr> research shows that 38% of our members who applied for finance were refused in the second quarter of this year.<\/p>\n<p>As the change will start when the rules come into force, it is important that small businesses have clarity around exactly which types of contracts will be affected.<\/p>\n<p class=\"last-child\">The <abbr title=\"Federation of Small Businesses\">FSB<\/abbr> agrees with government\u2019s stance that invoice financing should never be used as an excuse for late payment. We welcome the steps being taken to improve payment culture, including the recently announced plans for a <a href=\"https:\/\/www.gov.uk\/government\/news\/new-commissioner-to-tackle-late-payment-culture\">Small Business Commissioner<\/a>, and the strengthening of the Prompt Payment Code.<\/p>\n<\/blockquote>\n<p>The <a href=\"https:\/\/www.gov.uk\/government\/collections\/small-business-enterprise-and-employment-bill\">Small Business, Enterprise and Employment Act 2015<\/a> allows the Business Secretary to introduce these measures, which received cross-party support during the passage of the Act through Parliament. A similar ban is in effect in the United States, Canada and Australia. <\/p>\n<h3 id=\"notes-to-editors\">Notes to editors<\/h3>\n<ol>\n<li>The government response to \u2018Invoice finance: nullifying the ban on invoice assignment contract clauses\u2019 is available on <a href=\"https:\/\/www.gov.uk\/government\/consultations\/invoice-finance-nullifying-the-ban-on-invoice-assignment-contract-clauses\">the consultation page<\/a>.<\/li>\n<li>British Business Bank has committed \u00a345 million to 3 providers of invoice finance for smaller businesses \u2013 <a rel=\"external\" href=\"https:\/\/www.inspiredcapitalplc.com\/\">Inspired Capital<\/a>, <a rel=\"external\" href=\"https:\/\/marketinvoice.com\/\">Market Invoice<\/a> and <a rel=\"external\" href=\"http:\/\/british-business-bank.co.uk\/partners\/urica\/\">URICA<\/a>.<\/li>\n<li>These measures will apply to England, Wales and Northern Ireland but not to Scotland, where contract law is devolved.<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Ban on anti-invoice finance terms in contracts will come into force early next year.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/60200"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60200"}],"version-history":[{"count":1,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/60200\/revisions"}],"predecessor-version":[{"id":60220,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/60200\/revisions\/60220"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60200"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60200"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60200"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}