Invoice Finance News – government attempts to alleviate SME finance barriers

Business Minister Mark Prisk recently announced supply chain finance was to be part of government’s attempts to alleviate finance barriers for small and medium-sized businesses as a result of the recession.

Mr Prisk, the Conservative MP for Hertford and Stortford met with heads of private businesses and finance experts in reaction to the some 160 responses to the green paper consultation, ‘Financing a Private Sector Recovery’.

One of the suggestions government received from the panel was to enable more supply chain finance. Supply Chain Finance is generally where businesses borrow against approved invoices, covering working capital while payments filter through and typically comes in the guise of Invoice Finance products such Factoring and Invoice Discounting.  Supply Chain Finance in covering working capital reduces the the likelihood of cash flow problems, which is still the biggest killer of SME’s.

The Department for Business, Innovation and Skills said the identity of the finance industry heads and experts in attendance at the meeting was confidential but that panel consists of “people who know about supply chain finance and could discuss how it works and what barriers need to be overcome to make it more available.”

“Today’s meeting was informative and useful,” said Prisk. “Supply chain finance is clearly an option that all large corporates should consider providing. It is one option that could help plug the funding gap of their suppliers while looking to cover working capital as they await payments. I look forward to further productive discussions on other finance options.”

Though fairly popular in any case, invoice financing has been subject to a 7% year on increase mainly attributed to the drying up of traditional bank credit lines following the credit crunch and recession.

The Government says it will release its full response to the green paper shortly.

Factoring Finance Ltd have more than 30 years experience in finding the best invoice and asset backed finance solutions for UK business.

With an extensive broker network and access to sector specialists, Factoring Finance can start unlocking the potential in your business, free up the cash in your outstanding invoices and leave you to put more time into your business. Services include: Invoice Factoring / Invoice Discounting / Commercial Finance / Business Protection

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