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Cautious SMEs Missing Out

New figures have shown that invoice finance is being used be more and more firms in order to get access to the funds that they need. However, on the whole, companies are remaining cautious when it comes to investment – and therefore are not taking advantage of the funding options available to them.

Positive Figures

The Asset Based Finance Association has announced quarterly figures that show both total funding and the turnover of companies using invoice finance are remaining positive, displaying year on year growth.

Turnover from those companies making use of invoice finance facilities, such as factoring and invoice discounting, has increased by 6% this quarter and compared to this time last year.Funding from the members of the Asset Based Finance Association has also risen around 4% year on year, with annual growth remaining positive.

The number of invoice finance clients has also risen this quarter, showing that the sector is growing and has potential to do even more for UK SMEs. Nearly 500 new companies started using invoice factoring methods, taking the total number up to nearly 42,000 companies.

Missed Opportunities 

However, when looking at the available funding, it’s clear that more companies could have benefited. Total funding available this quarter was nearly £23bn – with around £7.5bn of this being unused by companies. This trend has continued over from the previous year, with firms not accessing all the funding available to them.

The figures show a broadly positive outlook when it comes to invoice finance and asset based finance, showing that these alternative finance measures can indeed help many small and medium companies. However, the cautious outlook which many firms are embracing  means that they may not be able to take advantage of this alternative route to growth and recovery.

While this is not surprising given the gloomy economic outlook, it could mean that many businesses are missing out on some valuable funding opportunities.


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