The invoice finance sector is showing positive growth according to the latest figures from the Factors and Discounters Association.
By Richard Green
According to the latest figures from the Factors and Discounters Association (FDA), the invoice finance sector of the UK Asset and Sales Finance Market has seen nearly £13bn advanced to more than 45,000 UK companies. While these clients still tend to be in the manufacturing and service industry sectors, there has also been a 32 per cent jump in retail organisations using invoice financing.
Comparing the quarter two statistics to last year the FDA has reported a:
- 16% overall growth in total client sales
- 2% growth in domestic factoring
- 17% growth in the use of domestic invoice discounting
- 105% growth in the use of export factoring and
- 25% per cent increase in the use of export invoice discounting
The invoice finance sector has seen a 10 per cent growth in large corporate organisations using invoice finance, but small and medium enterprises still make up the majority of the market, according to the FDA figures. Quarter two has seen a surge of companies with turnovers up to £500,000 using invoice financing, suggesting a growth in start-ups. Companies in this bracket make up around 40% of FDA members' clients.
The figures also show a 17 per cent increase in funds advanced to companies with turnover between £10m and £50m, demonstrating the increasing appetite and appreciation of more established companies for the flexibility provided by invoice financing.
Chief executive of the FDA Kate Sharp said: "Each quarter we've witnessed a growth in total sales and funds advanced and June results prove to be no exception. It is particularly pleasing to see that we now have 137 companies with a turnover greater than £1 billion using invoice finance as part of their funding package."
The FDA takes figures from more than 40 organisations, operating in the factoring and discounting sectors, to come up with its quarterly statistics.
As the current market leader, Martin Morrin, Director of Barclays Asset Based Lending, said that the secret to success in the current sales finance market was to, "Offer flexible solutions ranging from traditional recourse and non-recourse receivables finance and asset finance solutions through to stock finance and cash flow loans", and to provide, "products that are competitively priced, offer tax benefits and can be tailored to the specific needs of an individual business."
About the Author
Richard lives in Edinburgh, is a keen writer on a variety of subjects, and is the main contributor to the personal finance blog Cashzilla
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