'Biggest change for a generation' - Firms react to Moveable Transactions (Scotland) Act coming into force

Business in Scotland can now borrow more easily against assets including whisky stores and machinery, thanks to the implementation of the Moveable Transactions (Scotland) Act 2023, writes Joshua King.

It marks a sea change in Scottish commerce, giving businesses greater flexibility to raise finance, allowing them to borrow against intellectual property like patents and trademarks and streamlining transactions. In short, it modernises trade.

At the time of the Bill's final vote at Holyrood, the then Public Finance Minister, Tom Arthur, said: "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."

The implementation of the Act will be a welcome reprieve at a time of high interest rates at home and abroad, and global economic uncertainty sparked by the Trump Administration's tariff assault.

But what does the Moveable Transaction (Scotland) Act mean for businesses and the legal sector? This is how leading firms responded this week.

Shepherd and Wedderburn

"Today marks the first day of the Moveable Transactions (Scotland) Act coming into force. It’s not an overstatement to say that this is the biggest change to commercial law in Scotland in a generation."

Director Neil Campbell highlighted nine key changes brought in this week, including the creation of a new form of fixed security granted over moveable property, shares and IP (the Statutory Pledge) and that it is now possible to take fixed security over moveable assets without possession being given to the lender.

Aberdein Considine

Ross Webb, Dispute Resolution Partner at the north-east headquartered firm, said: "From a commercial disputes and insolvency perspective the Register is a game changer by providing real time access to info which includes assignations of customer invoices, future rent, intellectual property rights as well as statutory pledges over most types of moveable assets, including plant and machinery, vehicles, livestock, stock and shares, and patents. A real 'lights on' moment."

Brodies

An article authored by Lindsay Lee (Senior Associate), James Wilson (Partner) and Evan Adair (Trainee Solicitor), Brodies said: "Extending the new statutory pledge to cover security over shares in Scottish companies removes these risks and will make taking share security more attractive.

"Scottish companies will be able to grant security and access financing more readily, and those lending to Scottish companies or companies with Scottish subsidiaries will be able to secure their debt more conveniently."

Burness Paull

Kendall Allan (Associate) and John Kennedy (Partner) concluded: "As a result of the MTSA, taking security in Scotland will become much more closely aligned with the position in England, which should create a more streamlined and satisfactory position for businesses and funders in Scotland.

"This should especially be the case for companies with a cross-UK presence. It removes many of the practical difficulties with fixed security over moveable assets and should make Scotland a more borrower and lender-friendly place to do business."

Anderson Strathern

Anne Chapman (Partner) added, considering if lenders would be interested in the new statutory pledge: "Although the statutory pledge will be available in principle from 1 April 2025 as a form of security, in practice it will only be available where a lender is willing to accept it.

"It is expected that banks and other commercial lenders may take some time to get comfortable with accepting a statutory pledge as security, and where it becomes used will be quite market-specific. Private lenders may be quicker to accept the statutory pledge."