The Small Business, Enterprise and Employment Act has become law after being passed by Parliament. The Act is intended to make it easier for businesses to access funding and also puts an end to zero hours exclusivity clauses.
Business minister Matthew Hancock said: “The Small Business Act is the first set of laws specifically to help level the playing field for small business.”
Measures introduced by the Act include:
- Improving access to finance and investment for small businesses;
- Opening up access to small business credit data, making it easier for a small business to seek a loan from a lender other than their bank;
- Requiring banks to pass on details of SMEs they decline for a loan to online platforms which can help match them with alternative finance providers;
- Introducing “cheque imaging” to speed up cheque clearing times;
- Increasing transparency on payment practices, helping small firms to negotiate fairer deals and shining a light on poor business practice;
- Cutting down on red-tape;
- Introducing a Pubs Code and Adjudicator to govern the relationship between large pub-owning companies and their tied tenants;
- Increasing support from UK Export Finance to boost export opportunities;
- Streamlining public procurement so small businesses get more access to public sector contracts.
In addition, the Act will stop the abuse of zero hours contracts by preventing “exclusivity clauses” which stop individuals from working for another employer even if the current employer is offering no work. It will also increase penalties for employers that break National Minimum Wage legislation.
Business secretary Vince Cable said: “The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain.”
He added: “The Bill’s measures also mean there is nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage.”