New laws on business borrowing will give ‘real and practical help’ to firms

Legislation which will deliver “real and practical help” to businesses by making it easier for them to raise finance has been passed by Holyrood.

The new law will make it easier for firms to borrow cash against assets, such as machinery.

But it will also allow them to borrow against intellectual property, such as trademarks and patents, and aims to make various kinds of commercial transactions more efficient and less expensive.

Public finance minister Tom Arthur told MSPs the Movable Transactions Bill was “legal and specialist”, but added that it was replacing legislation that was “outdated and no longer fit for purpose”.

He stated: “It is clear that cheaper and less risky access to finance will provide a boost to these businesses not just in terms of survival and making ends meet but in terms of development and growth.

“So while this Bill is legal and specialist, on the ground it is intended to deliver real and practical help to businesses across Scotland.”

He added: “Anything that can be done to improve the environment in which business in Scotland operates should be welcomed.”

With the legislation passed by 111 votes to zero, the minister hailed it as a “significant step forward in modernising the law”.

He added: “I’m pleased that MSPs have agreed to reform the old rules and bring borrowing practices in Scotland in line with other countries.

“Businesses will now be able to borrow more easily against assets they own such as machinery and intellectual property rights by raising finance against them.

“These changes will make processes easier and cheaper as it is hoped lenders will be more likely to charge lower interest rates given that they will be lending against secured assets.”