Invoice finance to SMEs rises to £711m | RBS Invoice Finance

Invoice financing to UK SMEs rises to £711 million

The popularity of invoice financing has pushed such lending to £711 million in the first quarter of 2016, according to the Asset Based Finance Association (ABFA).

Small businesses across the UK are rapidly turning to invoice financing, which enables a company to borrow against unpaid invoices, in order to enact growth plans, boost cashflow and expand their order books. In part, the rise in invoice financing has been a direct response to more traditional lenders being ever more reluctant to lend to small companies.

As a result, invoice financing across the UK rose 63% in the first quarter of 2016 to £711 million compared to the same period in 2015 – when invoice financing accounted for £435m. On average, small businesses borrowed £52,000 against unpaid invoices in Q1 2016, up from an average £32,000 in Q1 2015.

Other forms of alternative financing include asset financing, where firms borrow against their inventory, property and machinery, for example. However, of all asset-based financing recorded in the quarter, invoice financing accounted for around 80%, according to the ABFA.

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