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Government develops new laws to help small businesses secure funding

The UK government is in the process of passing new regulations that will outlaw unfair contracts.

The changes will help small business owners to raise money against unpaid invoices. Giving all firms, rather than just the large ones, access to invoice financing will put around £1bn into the economy over the long term. Currently, many larger companies stipulate in the contracts they make with smaller firms that they cannot raise funds against their invoices.

This new law, the Business Contract Terms (Assignment of Receivables) Regulations 2018, comes under government’s Industrial Strategy project. It is an initiative that is designed to create a working environment allowing small firms to prosper and grow.

Kelly Tolhurst, who is the Small Business Minister, said about these changes when they were announced:-

“These new laws will give small businesses more access to the finance they need to succeed and will help ensure they have a level playing field from which to set fair contracts with the businesses they supply.”

Being able to raise money in this way will greatly improve cash flow for small firms. With the help and advice of their Wirral accountant, business owners can potentially secure short-term loans by using recent as yet unpaid invoices as collateral.

In some cases, an amount up to 80% of the value of the invoice can be borrowed. Potentially, there is no need for the company to wait 30 days to get paid, so cash flows back into the business much more quickly.

Posted by Mark
October 3, 2018
Small Business

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