SECURED LENDING REFORMS DRAW NEARER

Reforms proposed by the Law Commission, intended to provide a more streamlined regime for secured lending to unincorporated businesses has received Government support, according to a leading corporate and banking lawyer.

“In our October update we reported on the Law Commissions conclusion that the legislation governing bills of sale, through which sole traders and unlimited partnerships grant security over moveable assets, was outdated and not fit for purpose,” says Philip Round, a partner based at George Green’s Wolverhampton office.

“This has prevented the widespread use of such assets to secure lending to unincorporated businesses.”  

Mr Round continues, “the Economic Secretary to H M Treasury has recently announced the Government’s overall support for the Law Commission’s recommendations and will seek to use a special Parliamentary procedure to fast track the enactment of legislation to implement the Law Commission’s key suggestions, with a view to changing the law by 2019.”

According to Mr Round, however, the Government’s support is not unqualified. “The Government intends to discuss certain issues with the Law Commission and will publish its full response once the findings have been fully considered and agreed with the Law Commission.”

Mr Round concludes “Whilst the finer detail is yet to be determined, a reform of the bill of sale legislation will remove unnecessary obstacles frequently encountered by our institutional lending clients when seeking to take security over moveable assets.”