By Ben Simmons
Firms which use invoice finance enjoyed robust sales growth of 13% in 2011, figures released today from the Asset Based Finance Association show.
Total client turnover in 2011 for companies using invoice finance has reached £238bn with total sales from this quarter alone now standing at £62bn. This continues the year long trend of firms which use invoice finance seeing an expanding sales base and trading successfully.
Total funding from members to UK and Irish companies has also grown significantly in the past year, with total advances up 7% year on year. The new figures are in stark contrast to wider net lending which has actually contracted by 3.7% in the same period and shows that British and Irish firms are increasingly turning to invoice finance to fund growth.
Larger companies are increasingly choosing to use invoice finance too. The number of members’ clients with turnover above £10million in the past year has risen from 3,126 in 2010 to 3,535 in 2011, a growth of 13%. This quarter the average client turnover has also risen, reaching £5.7 million, up by 13% on this time last year.
Kate Sharp, chief executive of the Asset Based Finance Association, said: “Invoice finance is absolutely vital to the strength of the UK economy, as it is one of the few types of finance actually growing and available to firms, particularly when compared to overall net lending which has contracted by 3.7%. Sectors such as manufacturing, distribution, construction and recruitment depend on this type of finance, to help fund both ongoing trading and to finance corporate growth. The new figures show that increasingly larger firms are choosing invoice finance because of both its inherent strengths and its availability. The overall figures are a strong endorsement of invoice finance and show that it continues to grow in popularity, not the least because firms which use it are able to grow and increase their turnover.”