The government is to ban invoice assignment clauses in business-to-business contracts, whereby large businesses can exclude mainly SME suppliers who use the alternative finance tool to manage their cashflow. Invoice finance allows businesses to raise cash against unpaid invoices, enabling them to operate without having to wait for clients to settle accounts. The Department for Business, Innovation and Skills stated: 'A supplier's commercial customers are currently able to contractually bar invoice assignment. This can raise the cost of, or even prevent access to, invoice finance. This is why we will nullify contractual terms which seek to prohibit assignment of invoices.'
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