Why?
Why companies do this? Because they don't want to be faced with a new creditor which could create ambiguity about who should be paid to. This with the possible risk of forcing the debtor to pay twice. This in itself is logical, but the consequence is that it severely limits SMEs' financing options.
New opportunities
With the end of pledge bans, business receivables become transferable or pledgeable, even if existing contracts or general terms and conditions previously prohibited it. This creates new financing opportunities, especially for SMEs, as these receivables can now be used as collateral. This could generate an estimated one billion euros in additional credit. The new rules apply to business transactions where receivables are transferred for financing purposes, with exceptions (think payments via G-loans, for example).
Also for existing agreements
It is worth noting that the law will also apply to pre-existing agreements, with a transition period of 3 months. Dutch factoring companies and also many SMEs are eagerly awaiting the introduction of this law. We hope it will come into force soon!
We can imagine that, as an entrepreneur, you have deeper questions about this. If so, please be sure to contact our specialists!
