The ABFA (Asset Based Financing Association) Q1 2010 statistics showed the current number of invoice finance clients supported by their members to be just 41,275. This is a decrease, from the previous year, of over 7%.

These clients represent significantly less than one percent of even the most conservative estimate of the total number of businesses trading within the UK.

The statistics prompted the question “Why don’t more businesses use invoice finance?”

To answer this question we conducted a number of pieces of market research amongst randomly selected SMEs to understand the causes. The results were surprising and we identified low levels of promotion and advertising within the industry as a key factor.

Of the SME businesses that were surveyed, 42% were unable to name even a single invoice finance company. This is little surprise when 80% of respondents said that, over the last year, they had not seen any invoice finance related advertising whatsoever!

These findings were corroborated when we questioned another group of SMEs about the reasons why they thought that the take up of invoice finance was so low. 31% replied, without prompting, that it was because invoice finance was not promoted enough and businesses had not heard of it.

We have made it our mission to get this message out to everyone within the industry as no single organisation can address the issue alone. The potential growth for our industry could be significant if we can raise the profile of these flexible cash flow products so that they can achieve their rightful market share.

Article contributed by Glenn Blackman MBA MCIM who writes regarding invoice finance and related matters at: www.glennblackman.co.uk and is the Managing Director of Cashflow Acceleration Limited, a specialist invoice finance brokerage.