The total number of businesses using asset based finance is rising by around a thousand companies year on year – showing how important this form of business funding is becoming in light of a lack of bank lending and tough economic conditions. It’s also clear that there’s a real awareness of non-traditional lending options growing amongst businesses of all sizes. However, it’s some of the UK’s smallest businesses who are increasingly turning to asset based finance.
Kate Sharp, chief executive of the Asset Based Finance Association, comments: “It is extremely heartening to see so many of the smallest businesses choosing to use asset based finance to fund their growth. Having recently surveyed accountants we know they say that access to funding is still a major issue for their clients.”
“With some signs of confidence returning it becomes ever more important that firms can take advantage of the new opportunities that growth presents. This is where asset based finance already plays an important part, and our industry is ready and willing to do more to help fund the recovery.”
It’s funding options such as invoice finance that are playing a bigger role in the recovery and growth of many different types of business. The flexibility of alternative finance is one of the big draws – it’s not only companies with big turnovers that can make use of it, but also smaller, fast growing SMEs and even start ups. Any business that sells to customers on credit through invoices could be eligible – some of the most common sectors to make use of factoring and invoice discounting are manufacturing, recruitment and distribution companies, but there’s much wider potential as well.
With so many new businesses coming to asset based finance year on year, it’s becoming one of the mainstays in the UK economy and businessfunding landscape.