The Moveable Transactions (Scotland) Act came into force on April 1, bringing Scotland’s lending legislation into alignment with the rest of the United Kingdom.

Lawyer Gavin Buchan, a partner who heads the banking law team at Scottish legal firm Lindsays, says interest in taking advantage of the new regime is growing.

He said: “This legislative change is already attracting interest from English funders and investors. We’ve spoken to several who are pleased to see it introduced and who recognise its potential to make cross-border transactions more straightforward.

“Lenders and financial brokers south of the border are starting to take notice of what the act enables. It’s a welcome development that removes unnecessary complexity and aligns us more closely with the wider UK framework.

“While it’s a myth that lending and investing in Scotland is more difficult than in the rest of the UK, it’s certainly the case that the previous rules around Moveable Transactions caused practical difficulties for some businesses operating here and looking to leverage finance.

“Scots law, in respect of the charging of moveable assets, as it stood before April 1, certainly was not fit for purpose.”

The new Act allows businesses to borrow more easily against physical – moveable – assets, such as machinery and stock. It also enables firms to raise finance against non-physical assets like shares, intellectual property, including trademarks and patents, as well as unpaid invoices.

Mr Buchan, who advises a wide variety of banks, lenders and borrowers, says financial institutions in Scotland are currently working through the fine details of what the Act means in practice.

He added: “Over the next few weeks, I expect to see the procedures that lenders will follow for finance supported by moveable assets begin to take shape. Potential borrowers will also begin looking to realise the practical benefits.

“The new Act is expected to benefit various sectors including construction, banking and intellectual property, by enabling more efficient access to secured credit. 

“Businesses will have more flexibility to finance operations using a wider range of assets. Small and medium-sized enterprises, partnerships and sole traders - which previously had limited options for securing financing - will benefit in particular.”

The Act includes new registration processes for some of the documents needed by lenders to take advantage of the changes and more effectively grant security.