Growth in asset-based lending (ABL) advances among UK Finance members partly offset weakness in the invoice finance sector during the second quarter of the year, figures from the trade association have shown.

ABL business grew 5.6% year-on-year in the quarter, reaching £4.3bn, partially offsetting a 3.7% drop in invoice finance advances, to £17bn. Overall lending was down 1.9%.

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While demand for export and import factoring surged, with advances up 13% to £501m, it was not enough to offset fall in the far bigger export invoice discounting segment, which fell 10% to £6.5bn.

Domestic invoice finance products recorded modest growth, with factoring rising 1% to £4.8m and invoice discounting 2% to £59.2bn.

In asset-based lending, facilities secured against plant and machinery saw the biggest increase, rising 12.7% to £426m.

Association members saw a slight increase in customer numbers, up 1.1% to around 40,300. Clients with a turnover above £10m saw the biggest growth, increasing 7% to over 5,000.

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Stephen Pegge, managing director for commercial at UK Finance, said: “”It is encouraging to see steady growth in client numbers for the second consecutive quarter, with over 40,000 businesses receiving funds through invoice finance and asset based lending.

“This is being driven partly by an increase in the number of larger businesses opting for this form of finance. We are also seeing the number of smaller clients and the funding provided to them remain steady, and the industry has the capacity and expertise to provide even more financing to these businesses in future.”