Small Business, Enterprise and Employment Act 2015

This important Bill received Royal Assent on 26th March 2015.

There are number of important clauses in the Act but one of the main changes is the prohibition on the ban on assignment of invoices. Previously a customer could stop a supplier company assigning an invoice to a factoring company.

Certain  companies  and Government departments would not allow their suppliers to assign an invoice to a factoring company. This was often done because  they did not want to deal with an organization that had a more robust approach to debt collection. As a consequence many businesses were faced with cash flow problems because not only could they not raise funds against outstanding invoices but also struggled to obtain prompt payment from their customer.

I found a number of Government departments refusing to allow any sort of assignment and often these departments were slow to pay as a result of internal procedures.

From my own experience working with clients, I found a number of Government departments refusing to allow any sort of assignment and often these departments were slow to pay as a result of internal procedures. Often the way around this a confidential invoice finance facility whereby invoices were assigned without knowledge of the debtor/customer. Discreet enquiries were often made by the invoice finance company to ensure the integrity of the invoices.

I shall be keeping an eye on this issue.