In 2014, during the Queen’s speech the nation was told about the Small Business, Enterprise and Employment Bill.
Included in the bill is legislation that will make it easier for new and small businesses to thrive in the UK. For the DJB team, this was welcome news because many of the firms who use our services are in this situation.
The bill will make it easier for small businesses to grow, compete, innovate, create jobs, and export their goods and services. To do this, improved access to finance is essential, which is something that the bill specifically addresses.
For example, the legislation outlaws many of the unfair clauses that many larger corporations currently include in the contracts that they make with smaller firms. Often, these clauses are designed to slow down the rate of payment.
Removing these clauses should significantly improve cash flow for many businesses, which will allow them to move fast to take advantage of investment opportunities.
Importantly, the bill will also help small and medium-sized enterprises (SMEs) to avoid contract clauses called ‘bans on assignment’, which prevent the firms from borrowing against their assets, in particular their outstanding invoices.
Currently many larger firms insist that their suppliers do no borrow against their invoices, with the clauses used across all sectors, although it is a more prevalent practice in the retail sector.
Naturally, at DJB, we welcome the introduction of this bill. Once it is introduced, it will allow us to help even more firms to use invoice and asset financing to grow, by providing an effective way to solve business cash flow problems.
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