Glenn Blackman of Cashflow Acceleration Limited has now published two research summaries detailing the results of all the invoice finance related market research that he conducted over the last year.

“We thought it might be useful to put together the following summary of the conclusions that we have reached from all the various results:

1. Customers Want More Flexible and Unrestricted Invoice Finance Funding – with the exception of cost, funding restrictions were the top issues for potential customers. They also wanted more flexibility around the provision of funding.
2. Invoice Financing Costs are High but also Misunderstood – cost is the key issue that businesses say is inhibiting the expansion of the invoice finance market. However to some degree prospective customers may also be over-estimating the cost of invoice finance. Promotion of more transparent costing would help.
3. Customers Think Invoice Finance is Overpriced – by an average of c.19% and a 25% price reduction would satisfy some 75% of potential customers.
4. Customers Want Instant Online Setup and Approval – the second most popular improvement to invoice finance generally was the requirement for facilities to be able to be approved instantly via the internet.
5. Product Awareness is Low – customers did not appear to understand the full range of invoice finance products that are currently on the market. Several of these already addressed particular requirements that they raised during the research.
6. Invoice Finance can have Funding Advantages over Overdraft – we found that overdraft is currently used far more widely than invoice finance. However, the levels of funding raised through invoice finance, as a percentage of outstanding debtors, can be significantly higher than that available via overdraft. Overdrafts also appear to have been reduced or removed in some cases
7. Invoice Finance has Growth Potential – the invoice finance industry has the potential to grow if the profiles of these products and providers were raised with potential customers. Our findings suggest that there is greater demand for invoice finance than is being met at present.
8. Product and Brand Awareness is Low – greater awareness of the benefits of invoice finance, and of the funders providing these services, would lead to a greater uptake.
9. Banks and Accountants are Key to Invoice Finance Market Growth – potential customers saw promotion of invoice finance via banks and accountants as the key to industry growth. They also advocated more general industry related marketing and felt that government support for invoice finance would also play a role in growing the market.

Full details of the various studies can be found at: http://www.glennblackman.co.uk/research/quicklink-to-our-2-invoice-finance-market-research-summaries/

Glenn Blackman

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