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The Asset Based Finance Association has welcomed the recent change in the ban on assignments by the Office of Government Commerce (OGC).
The ban on assignment of debts prohibited a company, which wishes to tender
for a public contract, from using an intermediary such as a factor or invoice
discounter to raise finance without prior permission. As a result, this has
prevented many SMEs, which are more likely to use such services in order to
improve cash flow, from tendering for public contracts.
Kate Sharp, Chief Executive of the Asset Based Finance Association, comments:
"It is a welcome change to hear some positive news amid all the negative
press at the moment. This change in procedure will benefit thousands of SMEs,
giving them access to finance and adding a much needed boost to the UK economy.
It also means that thousands of companies using invoice finance will now be
able to compete on a level playing field for government tenders.
"Not only does the OGC’s change support the spirit of the Chancellor’s and Lord Mandelson’s promise to help "tease out the problems" small firms are having with bank loan arrangements, it will go a huge way in helping the SME community to access larger contracts."
If you would like to chat to a member of the ABFA to talk through the positive
effects of the change in the standard, please call Rebecca Maund or Derek Harris
on 0207 255 6400.