By Henry Harding & Rebecca Mauleverer
For many companies, receivables (rights to future payments) are one of the biggest assets on their books. Receivables finance (specific finance backed by those future payments) enables businesses to raise cash through an assignment (by way of security) or the outright sale of the receivables under a factoring or invoice discounting facility. For SME companies, this is extremely helpful when they are suffering from cashflow difficulties or simply because they often have a long time to wait for payments to be settled.
Under English law, the terms and conditions of a contract for supply of goods or services can restrict or prohibit a business supplier from having the ability to transfer and assign their rights created under that contract, meaning it is harder for businesses to raise finance on their receivables.