In one of our previous surveys of 100 SMEs we found that 88% of respondents said that they used overdraft. This is significantly higher than the fraction of 1% that use invoice finance. This led us to investigate why customers seemed to opt for overdraft over invoice finance and if there was anything that could be done to switch customers to invoice finance from overdraft.

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As the New Year begins, members of Factorscan’s Editorial Board in the UK, Spain, Canada and Singapore, share their thoughts on the year that was, and consider what may lie ahead in 2012.

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Ben Hayward has been appointed to the role of Regional Sales Manager for the Invoice Finance Division of new British bank, Aldermore.  Reporting to Tony Smedley, Aldermore Invoice Finance’s Birmingham based Regional Managing Director, Ben is responsible for raising awareness of the bank’s invoice finance proposition in the Midlands area.

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Recently a number of invoice finance providers offering selective facilities, where the client can select specific invoices to finance rather than receive finance on all invoices, have entered the market and a few invoice finance auction sites have been launched.

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Aldermore, the new British bank, has appointed Damon Walford as Managing Director of its Invoice Finance business, which markets a range of factoring and invoice discounting facilities to small and medium sized businesses throughout the UK.  Continue Reading

Anil Stocker, Co-Founder of MarketInvoice comments “90 per cent of the business banking market is dominated by just 5 high street banks. A lack of choice in financial products and a monopoly on capital distribution has stifled UK companies’ growth plans, many of which are burdened with unreasonable costs of finance.

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Invoice finance has continued to grow in popularity for both SMEs and larger companies according to a new economic report and quarterly figures released today by the Asset Based Finance Association (ABFA). Total advances from members currently stand at £15.7bn, showing strong year-on-year growth of 12%.

This growth comes on the back of continued growth in advances over the past five quarters and shows that UK and Irish firms are increasingly opting for this type of finance over other forms of lending. The latest figures also show invoice finance clients are again choosing not to access all of the funds available to them. Total available funds this quarter were £22.2bn, with £6.5bn of finance available but not drawn.

Of the total funding provided by members, SMEs received almost 40%, or just over £4bn this quarter.  A decreasing gap in the level of advances between SMEs and businesses with turnover above £100m suggests a growing confidence amongst SMEs as they get comfortable with increasing debt levels. This is supported by total clients’ sales growing 14% over the past year to reach £59bn.

The latest ABFA economic report also shows that export and import factoring have both grown substantially, enjoying a year-on-year rise in client sales of 48% and 47% respectively. This leap in demand for import and export factoring indicates that while the UK market remains sluggish, clients are looking to customers outside of the UK to buy their products, and are choosing this type of finance to help facilitate overseas trade.

Credit protection payments by ABFA members to their clients have also continued to decline, dropping by 27% over the last year to total £4.9m, consistent with the UK-wide trend of lower default rates on loans and a stable rate of write offs. Together with the shortening average debtor day numbers both these factors reflect one of the key product benefits of asset based finance, namely introducing firmer debtor disciplines.

Kate Sharp, chief executive of the Asset Based Finance Association, said: “The figures in our new economic report indicate growing business confidence amongst invoice finance clients, both SMEs and larger firms. This contrasts markedly with the general negative sentiment concerning the state of the wider UK economy and a general contraction in the stock of lending. Firms using invoice finance are seeing rising sales and are continuing to have access to an ample supply of finance. With total client numbers rising by 244 in the last quarter, the invoice finance sector is providing much needed finance to many UK and Irish businesses and is, and will continue to be, a significant contributor to supporting the wider economic recovery.”

Article contributed by the ABFA

Glenn Blackman of Cashflow Acceleration Limited comments:  ”To answer this question I first turned to the Asset Based Finance Association’s statistics to June 2011 and saw that they reported a 0% change in client numbers over the previous year. This suggests that even if an opportunity had been created it has not resulted in significant growth in invoice finance client numbers. Continue Reading

The next 10 years will herald a ‘seismic shift’ in the UK business landscape, but business fundamentals such as access to funding will still apply, according to a futurology report launched this week by Bibby Financial Services. Continue Reading

UK businesses remain worried about the future, with only one in three expecting their business to expand in the next six months. For 28% of businesses, the primary concern is winning new business. Continue Reading