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Invoice Finance Growing in 2012

These days, the funding climate for SMEs is anything but easy. It’s necessary to navigate your way through all sorts of options, old and new, in order to find the most suitable financing for your business. The unavailability of bank lending has caused many more businesses to turn to options such as invoice finance. While before factoring and invoice discounting might have had a low profile, they’re becoming more and more indispensable for the UK’s small businesses – especially those which are looking to grow.

The number of businesses using invoice finance in the UK has risen over the past few years. Far from being an unknown, rarely used method of financing, there are now around 43,000 businesses in the UK using factoring services. This rose by 4% in 2012, showing that the current climate in the UK has precipitated a rise in businesses looking to take advantage of alternative lending opportunities. Invoice discounting is the most popular form of asset based lending, with the number of companies using the service rising to 18,500 from 17,300 last year.

For 2012 overall, the Asset Based Finance Association is predicting a 9% growth in the industry. What’s more, there’s predicted to be a 13% increase in client sales volume, a 7% increase in advances and a 1% growth in client numbers overall. When you compare to bank lending and the shaky figures for SME lending, there’s no doubt that alternative finance is becoming a mainstay of the country’s small businesses.

If your business is looking for a better way to improve cash flow and cover bills at the end of the month, then invoice discounting or factoring could help. You could unlock the capital tied up in unpaid invoices to solve late payment problems.


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