Strongest ever quarter for invoice finance

Total sales from businesses supported by invoice finance broke £71 billion for Q3 2013, the strongest ever quarterly performance; this is up by some 14 percent on the same period last year.

The latest quarterly figures from the Asset Based Finance Association (ABFA) show that the invoice finance industry is now supporting more than 43,000 businesses. Total client turnover for 2013 to date stands at more than £202 billion, with invoice financiers projected to support over £270 billion of client turnover for the full year. This would be an increase of more than six percent on 2012’s record total.

At the close of Q3, ABFA members had total advances out to clients of some £17.4 billion, up six percent on the same period in 2012. This is only the fifth time the funding balance has been above £17 billion, and the industry has achieved this milestone in both of the last quarters.

This contrasts markedly with the wider lending picture. Net lending to SMEs contracted by £1.4 billion in Q3 2013, continuing its general trend throughout 2013.

The invoice finance industry continues to support smaller businesses, with almost 15,000 being found in the £0 – £500,000 turnover bracket, and over 30,000 in the sub-£5 million bracket. However, the data shows that invoice finance is being used by more larger businesses as well; the biggest increase in client numbers was seen in the £100 million plus turnover bracket, up eight percent on the previous quarter.

Invoice financiers are most active supporting the services (30 percent), manufacturing (29 percent), distribution (24 percent), transport (seven percent) and construction (five percent) sectors. The industry is reporting particularly strong demand in the services sector from the recruitment industry.

ABFA Chief Executive, Kate Sharp, says with the OECD revising upwards their predictions for the UK economy, and stronger-than-expected GDP figures, the recovery is clearly well underway:

“The latest figures show that the invoice finance industry is playing a central part in the recovery, with record client sales figures for the last quarter and continued growth year-on-year in the funding balance. The strong demand for this type of funding from small and large companies alike is heartening; so too is the diverse sectoral split. Firms that need finance should be speaking to their funders and advisers about invoice finance, as the industry can help many more firms grow and take full advantage of the economic recovery.”