Invoice Finance restrictions on contracts to be outlawed from early next year

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Anna Soubry

Minister for Small Business, Anna Soubry (pictured left) has announced that, from early next year, clauses in commercial contracts that obstruct the use of invoice finance (including “ban on assignment” clauses) will be outlawed.

This move is a direct result of the government’s crackdown on Britain’s late payment culture, after it was estimated that British businesses are owed approximately £26.8 billion in overdue payments – a figure that is set to rise.

For some businesses, invoices are the only assets against which they can borrow and larger firms especially can use restrictions in their terms and conditions to prevent supplier invoices being financed. This leads to delayed payments, and cash-flow difficulties for many SMEs.

Jeff Longhurst, chief executive of the Asset Based Finance Association said: ‘This is good news for UK businesses. 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.”

The Government has consulted a wide range of interested parties on this subject, including business owners, trade associations, lenders, academics and legal practitioners, and this change in the law is the result of feedback received.

A summary of the changes is as follows:

  • Apply to business to business contracts only (and not business to consumer contracts).
  • Extend to all businesses, regardless of size.
  • Exclude financial services contracts.
  • Exclude contracts with interests in land.
  • Do not create any special provisions for supply chain finance arrangements. This will allow suppliers to opt into supply chain financing agreements or seek alternative arrangements with other invoice financers.
  • Begin from commencement of the regulations – changes will not be retrospectively enforced.
  • Only apply where the parties conduct a business to business transaction under English law and one of them carries on business within the UK.

The Government hopes that by implementing these changes, it will directly benefit smaller businesses and reduce the abuse of position that some larger companies have exerted in the past. It is also hoped that it will contribute to making the UK a more attractive place to start and grow a business without fear of cash-flow issues or access to needed funds.

Pushing up, to kick Cancer

Ian Wedge, Gener8’s Regional Sales Director, mingled with local business people at a Barclays networking event on 22nd July, in bustling Bournemouth.

Besides being able to get his hands on the Barclays Premier League trophy in all its glory, Ian was able to meet local Bournemouth business people, including Leon Warner, a Group Leader with Utility Warehouse (www.leonwarner.com).

Leon explained all about his current fundraising efforts in aid of Lewis-Manning Hospice (www.lewis-manning.co.uk), a charity also close to Ian’s heart.

Ian Wedge Gener8 finance

Left – Ian Wedge Right – Leon Warner

Lewis-Manning Hospice is a voluntary organisation located in Poole, that offers free specialist palliative nursing care to around 700 local people each year living with       cancer and other life-limiting illnesses.

Ian says, “I really enjoyed the event and meeting Leon. It was great to shake his hand in front of the famous Barclays Premier League Trophy and to hear all about how he is fundraising. I am also excited because my team AFC Bournemouth will be contesting the Barclays Premier League trophy this coming season, alongside the likes of the current holders Chelsea, Arsenal, Liverpool and Manchester United.”

Ian by the Premier League trophy

Leon is looking to raise £1,000 for the charity by performing a ‘daily press up challenge’.

Starting on day one, by doing 1 push-up, Leon aims to achieve his goal by adding 1 extra push up every day. With a goal of 200 and currently on 84 push ups, Leon is set to achieve his target!

Inspired by his effort, Ian pledged £100 to Leon on behalf of Lewis-Manning, when he reaches the halfway 100 push-up mark.

Ian and the Gener8 team wish Leon the best of luck completing his challenge.

If you would like to support Leon by donating, please follow the link: www.justgiving.com/Leonpressups

Gener8 Finance appoints new Managing Director to lead business growth

615 G (25)Oxfordshire-based Gener8 Finance, one of the UK’s leading invoice finance providers, has announced the appointment of Paul Stokes, as its new Managing Director.

Paul is a specialist in commercial funding, having previously worked for major banks and, for the last 4 years, has been Managing Director of a successful commercial finance consultancy. It is this breadth of knowledge and experience that he will bring to the business, to enhance Gener8’s reputation further as a specialist provider of SME cash flow funding products.

Gener8 offers a range of working capital funding solutions to owner-managed businesses, specialising in providing fixed-price, confidential invoice finance facilities.

David Richards, Director and Founder of Gener8, commented: “We are delighted to get Paul on board. He is highly experienced in all aspects of commercial finance and shares our vision of what an invoice finance business should be about – great customer service, flexible funding and value for money. I am looking forward to working with Paul to grow our business and evolve the Gener8 brand. ”

Paul was pleased to say that: “As one of the most progressive invoice finance lenders in the country, it was an easy decision to join Gener8. In my previous role as a commercial finance consultant I regularly introduced clients to Gener8 and I have experienced at first hand the company’s total commitment to client care, communication and a willingness to go the extra mile.”

Paul’s primary objective is to strengthen Gener8’s standing as one of the most trusted invoice finance providers in the UK, ensuring that new and existing clients receive the highest standards of customer care and market-leading products.


 

Please visit www.gener8finance.com to find out more about Gener8 Finance and to find out how they are leading the way in funding UK businesses.