Minister Kelly Tolhurst MP Brings Forward Draft Regulations to Improve SMEs’ Access to Finance

Last month, I was delighted to speak for the first time as Minister for Small Business and Corporate Responsibility and bring forward positive draft regulations for the UK’s small and medium sized businesses (SMEs).

The Business Contract Terms (Assignment of Receivables) Regulations 2018 will put an end to supplier SMEs being prevented from accessing the finance they need to thrive and grow. Finance is the lifeblood of those businesses, yet many of them are denied by their customers the ability to access one particular finance option. That is the anomaly that these draft regulations will put right. In future, SMEs will, if they choose, be able to raise finance on their invoices more easily.

To offer invoice finance, providers will simply need to assure themselves that the supply contract was entered into on or after 31 December this year and that none of the exemptions apply - for example, that the supplier is not a large enterprise. The change will also unlock additional finance for existing clients where advances are currently restricted due to prohibitions on assignment imposed by some of the SME’s customers. The position for both supplier and finance provider will be simpler and more certain, which will help to create the significant benefits that are expected to flow from the regulations.

Invoice finance will not be the right choice for every business, but that should be a decision made by individual entrepreneurs, not made for them through onerous terms imposed by their customers. For more information on the draft regulations and what they will mean for our SMEs, click the link at the bottom.

Britain’s 5.7 million small and medium-sized enterprises are the backbone and driver of our economy, accounting for more than half of turnover and 60% of employment in the private sector, and it is right we assist them. The Government continues to look at many different ways to increase small businesses’ access to finance - having run a small business, I know how crucial that is.

For the full coverage of my speech and the debate follow the link here: