Finance chief responds to government changes for SMEs
Richard Pepler, who is CEO of HH Cashflow Finance Limted, has responded to yesterday’s announcement that small companies will be given the right to borrow against unpaid invoices issued to big business customers.
Until now larger firms have been able to draw up contracts banning smaller businesses from using invoice financing
He comments: “This is great news for UK businesses.
“Cash is the lifeblood of any business and this change will make it easier for SMEs to access the money they have worked so hard to earn.
“Removing these restrictions on invoice financing will mean SMEs can secure the funding they need to invest and grow.
“Since the recession SMEs have found it harder to access funding through the traditional high street banks – less than a third of SMEs managed to borrow via a bank loan, overdraft or credit card in 2014, down from 39 per cent in 2011, according to the most recent BDRC Continental study of business finance.”
He continues: “Small firms are owed more than £32billion in late payments according to some estimates.
“This welcome move by the government to outlaw the banning of invoice finance will go some way towards helping SMEs finance growth and investment and free up working capital. This will benefit the UK economy as a whole.
“There was no reason for big business to maintain this power over their smaller counterparts.”