Government Announces Plan To Ban 'Anti-Invoice Finance' Terms Lawyer Comments On Latest Move 12.08.2015 David Shirt, Press Officer | 0161 838 3094 Restrictive clauses which limit the ability for small businesses from using invoice finance are to be banned from next year, says the Government. According to the Asset Based Finance Association, over 44,000 organisations receive more than £19bn of funding through invoice finance - but it is claimed that the market’s potential is restricted by clauses that some organisations apply to their suppliers limiting the use of invoice finance. In some cases, larger businesses insist in their contracts that their suppliers cannot use invoice finance. Under the new laws to be introduced, the ability to include these provisions will be disallowed, while retaining a customer’s right to prevent sub-contracting arrangements where it wishes. Small business minister Anna Soubry said: "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 cashflow. "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." Jeff Longhurst, chief executive of the 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 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.” Expert Opinion“It is good to see the government engaging with the industry on this. Invoice finance is vital for many businesses, small and large, and particularly those which are growing and creating jobs. The change will relieve one issue that prevents the use of this important source of finance and we can see only benefits to the business community.” Jon Bew, Partner Key contact Jon Bew Partner +44 (0)788 919 8073 Email Jon Press contact David Shirt BLS PR Manager 0161 838 3094 Email David Tags Services for Businesses Banking & Finance Jon Bew Related articles 20.02.2017Financial Conduct Authority And Prudential Regulation Authority Publish Decision Making Changes 15.02.2017Cocoon Aims To Secure £2.5m For Latest Expansion Drive 14.02.2017Serious Fraud Office - The Big Funding Debate 14.02.2017Inflation Rises As UK Feels Effect Of Weak Pound Post-Brexit Vote 10.02.2017Today's Court Of Appeal Ruling To Have Impact on Uber And Other Firms In 'The Gig Economy'