The Asset Based Finance Association (ABFA), the trade body for the invoice finance and asset based lending industry in the UK and Republic of Ireland, has launched a self-regulatory framework which comes into force this week.

It incorporates a revised ABFA code, based on six key principles around treating customers fairly and responsibly. The code includes, for the first time, an independent complaints process managed by the specialist dispute resolution organisation, Ombudsman Services.

ABFA says the complaints process has been designed with a particular focus on supporting smaller businesses (those with a turnover of up to £6.5m per annum) by offering them access to an independent process if they believe they have been not been treated fairly.

Within the framework, the ABFA has also established a Professional Standards Council which will oversee the new code and complaints process and which will be able to take sanctions against members who fail to follow agreed procedures.

Matt Haw, Baker Tilly partner, said: 'Invoice finance and asset based lending are excellent sources of funding for SMEs, but sadly the public perception of the sector has not always matched the benefits provided by the funding that is available. This initiative is an important step forward in helping to improve the confidence in the industry and to ensure the consistency of standards across all lenders. We hope this will encourage more SMEs - particularly those who have been unable to obtain funding from traditional providers - to consider these alternative sources of finance.'