Invoice finance keeps on growing

New quarterly figures from the Asset Based Finance Association have shown that both total funding and turnover from companies using invoice finance remained broadly positive in Q1, with year-on-year growth.

However, UK and Irish firms are still remaining cautious and not accessing all of the funding which is available to them.

Turnover from companies using invoice finance grew 6% in Q1 2012 compared to the same period last year, with total client sales at £59.2bn, up from £55.6bn in Q1 2011. Funding by the ABFA’s members to businesses has also risen 4% year-on-year, with £15.4bn outstanding in advances at the end of March. While this figure is slightly down on the previous quarter’s total advances (by 1.9%), the fall was fully expected with Q1 figures traditionally showing a slight drop and annual growth remaining positive.

This year-on-year growth contrasts noticeably with the rise in available funds, which, at 8%, is double the rise in advances. Total funding available in Q1 2012 stood at £22.9bn, meaning there is a further £7.5bn of finance which companies could be accessing. This guarded approach has continued for more than a year now, with firms steadfastly not accessing all of the funds available to them.

The total number of clients using invoice finance also rose noticeably in Q1, underlying the sector’s growth potential, with a net total of 493 new clients coming on board, pushing total client numbers up to 41,989.

Kate Sharp, chief executive of the ABFA, said: “The new figures show a broadly positive picture, with both total funding and turnover from companies using invoice finance rising year-on-year, plus the number of clients increasing. However, the new figures also show a conservative approach to accessing funds from firms, with their appetite for new investment and maximising growth potential being muted. With the economy back in recession perhaps this is not surprising, but equally it does mean there will probably be missed opportunities.”