According to new figures from the Asset Based Finance Association (ABFA) show that more and more small businesses are turning to invoice finance as a way to achieve growth, improve cash flow and access valuable business funding. Against a backdrop of tentative economic recovery, this shows that the UK business finance landscape is helping small businesses to contribute to the wider recovery of the UK.
These latest figures show that smaller firms are using asset based finance – this includes firms with turnover of £0-£500,000. Client numbers with companies in this bracket are up by 3% across this quarter alone. In total, more than 15,000 of the smallest businesses in the UK and Ireland are supporting themselves through asset based finance. Many use these products for every day working capital as well as funding growth. These kind of numbers are the highest for smallest firms using asset based finance in the last three years.
Overall the asset based finance industry is growing as well – total sales from businesses using asset based finance are up 9% when compared to last year. This has hit the £63 billion mark showing that asset based lending is becoming a big part of the UK lending environment.
Total funding provided for asset based finance to clients has also grown, growing from £15.3 billion last year to more than £16.3 billion this year, showing an increase of 6%. This is even more important when set against the overall contraction of lending from other sectors of the lending environment in the UK. Asset based lending is becoming a real help for many small businesses who might otherwise be unable to access the funding that they need.