Figures released from the Asset Based Finance Association (ABFA) have shown that more and more small businesses are turning to asset based finance in a bid to recover more strongly and make the most of the growth opportunities available to them. Against a backdrop of shaky economic recovery in the wider UK, this shows how valuable alternative forms of finance are becoming to the UK’s SMEs.
The figures released from the ABFA have shown that increasing numbers of smaller companies with up to £500,000 turnover are using asset based finance to increase their client numbers. Over 15,000 of the smallest businesses in the UK and Ireland are supported by asset based finance, using factoring, invoice discounting and other asset based products to unlock working capital and fund growth.
Asset based finance has contributed to growth for a huge number of these businesses. Total sales from businesses using invoice finance are up 9% compared to the same period last year, between Q1 2012 and Q1 2013, reaching a total of £63 billion. Total funding provided by the asset based finance industry to clients has also risen – advances from the ABFA’s members grew from £15.3 billion last year to £16.3 billion, an increase of 6%.
Invoice finance is one of the big contributors to the alternative finance landscape. If your business wants to grow and take advantage of its benefits to cash flow and day to day running, then factoring or invoice discounting are two options that could help your company. Not only is the alternative finance industry growing, but it’s helping smaller firms to grow as well – if the banks are letting your business down then invoice finance could be a good option.