Receivables Finance - Overriding Blocks To Assignment

The Small Business Enterprise and Employment Act received Royal Assent on 26 March and, when implemented, is expected to produce a huge boost in SME receivables finance.

Sections 1 and 2 of the Act allow the Secretary of State to introduce regulations overriding anti-assignment clauses in contracts:

• for the provision of goods, services or intangible assets (including intellectual property);
• where at least one of the parties has entered into the contract in connection with carrying on of a business; and
• which are not excluded financial services contracts (such as for the provision of life assurance, banking or financial services).

Once introduced, the regulations should make it simpler for SMEs to sell their debts.