UK businesses raise record £20.3 billion in invoice finance
UK businesses have raised a record £20.3 billion in invoice finance this year, according to figures from the Asset Based Finance Association (ABFA).
An increasing number of small businesses are using invoice finance, resulting in the first time the £20 billion barrier has been broken.
ABFA’s figures showed that the amount raised in invoice finance has increased by 5 per cent since last year, up from £19.3 billion, and has increased by 27 per cent since 2011 to 2012, up from £16 billion.
The record amount is thought to have been driven by an 18 per cent increase in the amount drawn down by UK businesses with a turnover of over £100 million, up from £5.8 billion in funding in 2015 to £6.9 billion this year.
The number of businesses using invoice finance has increased more slowly than the amount borrowed, with the total number increasing by just 1 per cent from 43,133 to 43,913 over the past year.
According to ABFA Chief Executive Jeff Longhurst, “Invoice Finance and Asset Based Lending are now an established part of the commercial finance market and there is increased appetite from larger UK businesses to secure funding through this route.”
He added: “Whilst the availability of finance from traditional sources was relatively slow to recover from the credit crunch, the asset based finance market opened its doors to businesses and there remains significant capacity to provide more finance to more UK businesses.”