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Invoice finance business use hits record level

The use of invoice finance by SMEs in the UK reached a record high in 2014, underlining its key role in small business finance provision.

According to new figures from the Asset Based Finance Association (ABFA), invoice finance and asset-based lending worth £19.3 billion was in use in Q3 2014, an increase of 12% over the same period in 2013. This level of SME invoice finance use is the highest on record.

ABFA data also show that businesses are now using invoice finance and other asset-based lending to access almost 40% more funding than in December 2009, when the country was at the height of the recession. The increase in use of these alternative finance services illustrates the degree to which the SME lending landscape has been redrawn in recent years and how this sector has emerged as a major source of small business funding.

Services such as invoice finance have proven a lifeline for businesses, helping to generate start-up funding and capital to maintain cashflow, in the face of traditional lender caution. With these traditional lenders still showing reluctance, the likes of invoice finance, peer-to-peer lending and crowdfunding look set to continue to fulfilling this role as economic recovery takes hold and order books begin to fill again.

The growth of invoice finance in 2014 illustrates this development, as do figures from the Bank of England that show bank lending to businesses fell by almost 3% to £381.5 million at the end of Q3 2014, its lowest level in over eight years.

As we look forward to 2015 and, hopefully, continued economic revitalisation, it is clear that invoice finance and other alternative finance services have an integral role to play in helping SMEs access the finance they need to flourish.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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