Asset-based Finance Grows for Third Consecutive Quarter

New figures from the Asset Based Finance Association (ABFA) show lending to businesses has grown for three quarters in a row. The total advances from members this quarter is £15.1bn, a growth of 4% year-on-year. This growth continues to show growing confidence among firms in accessing the funds available to them and is the highest total lending figure since March 2009.

The ABFA figures clearly show that this form of lending is very much open and available to businesses, in stark contrast with wider net lending which continues to fall.

Sales from firms financed by asset-based finance have performed particularly strongly this quarter with a double-digit rise of 11%. Year-on-year figures also show a similar growth of 11%, indicating that firms that use invoice finance are growing sales and out performing the wider economy.

The total values against which the lending is made are also at a record high, standing at £31.7bn, the highest it’s been since 2006, indicating the increasing strength in the balance sheet of businesses using this form of finance.

Export invoice discounting has shot up 49% this quarter to sales of £3.29bn, continuing the trend seen last quarter that firms are increasingly looking abroad for sales and growth opportunities.

Kate Sharp, chief executive officer (CEO) of the ABFA, said: “These quarterly stats confirm the trend that asset-based finance is rising in popularity and is a vitally important form of business lending. While other forms of lending are showing a decline, this is the third quarter in a row where total lending from ABFA members has increased. SMEs [small and medium-sized enterprises] and larger companies which use asset-based lending are clearly enjoying increased sales and it’s really good to see this positive news when other indicators are broadly negative.”


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