The latest figures from the Asset Based Finance Association (ABFA) show that the number of companies using invoice finance services in the UK and Ireland is growing. There’s also an increase in the amount of funding available, excellent news for businesses who may be finding it difficult to make ends meet.
In comparison to last year’s figures over the same quarter for April-June, the total number of businesses using asset based finance has risen by 4% overall, recording numbers of around 43,000. Invoice discounting is the most popular form of asset based finance, allowing businesses to unlock the capital tied up in unpaid invoices but letting them retain credit collection duties. The number of companies using invoice discounting increased from 17,300 last year to over 18,500 in the same period this year.
The ABFA has reported that the total advanced to businesses was £16billion, an increase of 2% on the same quarter last year. There was also an increase of 4% in the total funding available rising from £22.5billion to £23.3billion for the same period. However, the harsh conditions prevailing in the economic climate and this is reflected in sales figures – there has been little change to these number in the same period in 2011.
Exports have been hailed by the government as a way to boost the economy, and this is also something that invoice factoring is helping with. Although overall number remain modest, there has been an increase of 8% in the number of companies using export invoice discounting services compared to the same period last year. This shows that more businesses are taking advantage of market opportunities overseas in an attempt to increase cash flow and profits.
Though growth expectations for the economy overall have not been fulfilled, there is still hope for small businesses looking for finance – asset based lending and invoice discounting in particular are two options that are helping more and more businesses find their feet.