New figures from Asset Based Finance Association (ABFA) Quarterly Industry Statistics show that the number of larger businesses using invoice finance has increase by 25 per cent in one year. The figures increased from 713 in 2014 to 893 in 2015 as business used ‘traditional’ sources of finance.
As asset finance is secured against invoices and other assets, it is considered a lower risk for funders to provide, meaning that big businesses can receive quicker decisions on asset based finance than they can for other products.
The ABFA states that 80 per cent of asset based finance is invoice finance. The other 20 per cent represent asset based lending where businesses can raise funds against assets they own such as machinery, property and other relatable objects.
Chief Executive of the ABFA, Jeff Longhurst said “Asset based finance is now one of the primary sources of funding for businesses of all sizes. It is competitively priced and providers can also offer quicker decisions on asset based finance than on traditional unsecured lending.”
Longhurst continued “Previously, this form of commercial finance had been associated with SMEs but we’re seeing increased appetite from the UK’s largest businesses to secure finance to fulfil growth plans and expand order books.”
The overall amount of funding provided to businesses through asset based finance has been estimated by ABFA to be worth £19.7 billion at the end of 2015.