MTA: Asset, Receivables and Invoice Finance

What you need to know about the Moveable Transactions Act:

The Moveable Transactions (Scotland) Act 2023 (the “Act”) was passed by the Scottish Parliament in May 2023, making fundamental, positive, changes to the commercial landscape in Scotland. The Act came into force on 1 April 2025 and made it easier to take fixed security over moveable property and contractual rights in Scotland.

What changed?

Previously, the only way to create fixed security over moveable property in Scotland was by way of a pledge. This required physical or symbolic delivery of the asset. The Act creates a new statutory pledge which will enable fixed security to be taken over certain moveable assets. Perfection is by registration in a new Register of Statutory Pledges without the need for delivery.

The previous law relating to security over contractual rights was uncertain and out of date. The Act clarifies key issues: the debtor can be notified of the security electronically; future claims can be assigned; and the debtor can perform to the assignor pending an event of default removing any requirement of control over the assigned claims. Registration of the security in the Register of Assignations will be possible as an alternative to notifying the debtor of the security.

How will this impact on asset finance, receivables finance and invoice finance?

The new regime improves the availability of asset finance for Scottish businesses.

Unlike floating charges, the new Statutory Pledge is available to partnerships and sole traders. It is also now possible to take fixed security over a class of property, for example a fleet of vehicles, without taking physical possession. This addresses the longstanding source of pain in Scotland regarding how fixed security is taken over whisky, for example it enables non-specialist lenders to provide finance secured against moveable assets. There is strong potential to improve the availability of asset finance for businesses in Scotland.

Receivables and invoice finance was somewhat inelegant in Scotland and placed a significant administrative burden on both borrowers and funders. Between the need to (i) notify (intimate) security over debts to individual debtors, (ii) demonstrate that control over the claim has been transferred to the funder to establish valid security and and (iii) enter into supplemental security every time new claims were sold and purchased, the inclusion of Scots law receivables in such financings often proved challenging.

The MTSA has since made it clear that it is competent to grant security over future claims. It provided certainty that the debtor in respect of an assigned claim (by way of security) can continue to perform to the assignor pending an enforcement event. It also introduced the Register of Assignations, which makes it possible to create a valid transfer or security right in respect of a claim by way of registration at the RoA, rather than exclusively by means of notification to the underlying counterparty(ies)). This is a hugely positive development and better aligns Scots law with the commercial landscape within which most practitioners operate.

The new Act modernises and clarifies the law, and from a practical perspective, will lessen the required administration for borrowers and risk for funders. This should make it easier for lenders to provide businesses operating in Scotland with access to receivables and invoice finance.

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