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Invoice Factoring Helping Construction to Grow

SMEs in the construction sector have been having a tough time of late, however, new figures have shown that Q1 of 2013 has been their highest performing quarter since 2008. Using data from 4,000 different SMEs, these figures show that within the construction sector there has been a period of significant growth in Q1 of this year – at least, growth from those businesses making use of invoice finance.

Performance is expressed as a numerical figure within these results, based on a mark of 100 which was set in 2008 when the Business Factors Index was first started. In the first quarter of 2012, using this scale, the Index stood at 93.6 for construction SMEs. A year later, in the first quarter of 2013, the Index now stands at 102.6. These businesses are all invoice finance users, showing they are benefiting from their use of alternative finance solutions. Indeed, within the wider construction sector, figures from the Office of National Statistics show that output fell by 6.5% over the same period.

Graham Planter, sales director for construction at Bibby Financial Services, commented: “The first quarter of 2013 has undoubtedly been tough for a lot of SMEs, but the BFI shows our construction clients performing well and investing in their businesses in the last twelve months – a far cry from Q1 2009 when activity dropped to only 76 points, and in stark contrast to the performance of the wider construction industry.”

This all goes to show how valuable invoice finance and alternative funding are becoming to the UK economy. Construction businesses are just one type of SME that can benefit, helping to ease late payment and cash flow issues and allowing business owners to invest back into their company. Factoring and invoice discounting are valuable tools for SMEs which should be top of the list if you’re looking for a finance solution from outside the banks.

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