The latest ABFA statistics show business owners
exploiting the cash flow solutions available, says Evette
Orams
Go deeper with GlobalData
The latest quarterly statistics from the Asset Based
Finance Association (ABFA) reveal that asset-based finance is
currently providing a viable alternative to more traditional bank
lending.
The figures show that businesses
turning over less than £5m (€5.7m) – which make up 84% of the
41,486 invoice finance clients – are particularly benefiting from
flexible funding solutions in the form of invoice finance.
It is especially cheering to see
that SMEs still have lending options available to them, as more
traditional funding solutions remain difficult to access and
businesses fear for their growth prospects, amid further reports
that the UK could suffer a double-dip recession.
Encouragingly, there has been an
annual rise of 12% in total advances made to invoice finance
clients in the second quarter of 2011, compared to the second
quarter of 2010, with the £15.8bn advanced during the quarter being
used to overcome a range of cash flow pressures during the current
economic and trading conditions.
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By GlobalDataThe figures also show client sales
are rising by 14% on an annual and quarterly basis, indicating
invoice finance is facilitating growth and expansion.
Invoice finance facilities,
particularly factoring, help businesses to get their money through
the door thanks to the dedicated ledger management service the
funder provides, which is particularly helpful in the current
climate where late payment is rife.
The results speak for themselves,
with credit protection payments made to clients falling by 28%
annually as the instances of debtor default declined.
Ultimately, the latest findings
indicate SMEs are considering more of the options available to
them. Given the current economic climate, we urge business owners
to continue to explore the range of cash flow solutions in order to
ensure their companies are equipped to deal with the challenges
they face.
Evette Orams is managing
director of Hilton-Baird Financial Solutions
