Invoice Finance Outperforms the Market with 9% Increase in Advances
New figures from the Asset Based Finance Association (ABFA) show invoice finance is outperforming all other types of business lending. Total advances from members have grown 9% year-on-year, whereas finance through leasing and hire purchase grew 8% and wider bank lending actually contracted by 2.5% in the same period.
The latest quarterly industry report from the ABFA shows turnover growth of 15% year-on-year, with total client sales in the quarter of £55.8bn.
Invoice finance clients are again choosing not to draw down all the lending available to them, showing that clients have sufficient funds for their business needs. The total funding available was £21.1bn, yet only £14.8bn was utilised by clients, meaning there were £6.3bn of funds still available.
The average turnover of clients using invoice finance has increased from this time last year, even though total client numbers have dropped slightly following the recession. The average annual turnover per client a year ago was £4.36m, whereas this has grown to £5.27m in 1Q11, a 21% growth in just a year.
Export factoring has continued to increase by an impressive 50% in the first quarter of this year and export invoice discounting was up by a further 22% as firms continue to look overseas for opportunities to grow their businesses.
Kate Sharp, chief executive officer (CEO) of the ABFA, said: “These latest statistics show just how successful the industry is; with very positive sales growth for companies using invoice finance, plus there is no shortage of available funds. Compared to all other major forms of business lending, asset based finance has grown the most, as both clients and lenders realise its inherent strengths in these unpredictable economic times.”