Invoice lending becoming popular with small businesses, research shows
- 19th July 2016
- Accountancy & Finance
Research conducted by the Asset Based Finance Association (ABFA) has found that invoice lending is an increasingly popular way for SMEs to access funding.
The report showed that invoice lending is now one of the main ways of funding the growth of small businesses across the UK.
The research showed that £711 million was lent to small businesses for the period January to March of this year, with an average of £52,000 per business.
The figures are a 60% increase on the first quarter of 2015, when small businesses raised £485 million in invoice finance.
According to the ABFA, approximately 80% of asset finance is invoice finance, as businesses are increasingly unlocking cash and growing their business from unpaid invoices.
Jeff Longhurst, chief executive of the ABFA, said that invoice finance is now “one of the primary ways” that small businesses access funding.
He said that there is a “growing appetite amongst small and medium enterprises to secure funding through this route”, with businesses securing constantly increasing amounts.
He added that accessing funding through traditional paths, such as business loans, has remained “challenging” for smaller businesses since the credit crunch that began in 2007, and so the “flexibility of finance options, competitive prices and the quick turnaround of decisions associated with invoice finance is a real draw for these businesses.”
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