Increased invoice finance freedoms for UK SMEs
Another government-led step forward for small businesses and alternative finance players nationwide.
Small Business Minister Anna Soubry has ended contracts that prevent SME suppliers from obtaining on-bill financing against the value of invoices owed to them by large companies. As of the beginning of 2016, the clauses prohibiting the use of financing by invoice will be cancelled. This comes after a government consultation on the cancellation of anti-invoice financing clauses.
The news will be welcomed by MarketInvoice and Platform Black, who between them have advanced c. £565m to UK SMEs so far. So far, a significant portion of loans from these platforms have been secured by amounts owed by prime debtors. The Small Business Minister’s decision to free SME owners from the shackles of onerous corporate contracts is expected to improve access to capital nationwide, and alternative options are becoming increasingly popular providers to turn to .
Anna Soubry commented:
“Small businesses are the backbone of the UK economy and we will do all we can to ensure they continue to grow and create jobs. By removing restrictions on invoice funding, thousands of businesses across the country could benefit from quicker access to hard-earned funds.
“While invoice financing isn’t for everyone and absolutely no excuse for late payments, I do wish small businesses had the opportunity to use it to boost their cash flow. It’s all part of our plan to maintain the UK’s position as the best place in Europe to start and grow a business.
The government’s drive to cement the UK’s position as a thriving hub of entrepreneurship has played wonderfully in the hands of the alternative finance market. We can now add bill financing freedoms to the growing list of state-led support structures, which already includes a plethora of tax breaks, the referral system, and more.
Anil Stocker, Founder and CEO of MarketInvoice, commented:
“Business owners will know the frustration of completing a job and waiting months to get paid; it is therefore important that businesses have the ability to use their invoices to access funds immediately.
“The government’s decision to prevent big business from preventing small businesses from using invoices to access finance is welcome, there was no good reason for big business to hold this power over their suppliers. “