A new funding option is in the future for small- and medium-sized enterprises (SMEs) in the United Kingdom. New laws put forward by Small Business Minister Kelly Tolhurst this week will "make it easier for small businesses to access invoice financing," according to a release from the government. This will in turn provide a one-billion-pound boost to the economy.
"The U.K.'s 5.7 million small businesses are the backbone of our economy and central to our modern Industrial Strategy, with more than 1,000 starting up every day," said Tolhurst in the release.
Some smaller businesses accept contracts from larger firms with language stating invoice finance is prevented, but SMEs and suppliers agree to terms because of a weak negotiating position. The new proposed laws will void such restrictions in contracts entered into after the end of the year, with some exceptions.
"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," concluded the small business minister.
-Michael Miller, managing editor