Asset based finance sector – best quarterly performance since recession
The Asset Based Finance Association has today announced its strongest set of quarterly figures since the recession hit. The new figures (quarter four, October – December 2013) show both the highest ever quarterly funding balance and record annual sales turnover for companies using asset based finance.
Total funding advances to clients has now hit £18.3bn, the highest quarterly balance ever. In December 2009 this balance was £13.9bn, but since then it has grown steadily most quarters to now hit over £18bn just four years later, an aggregate growth of some 32%. The balance has grown 11% in the past year alone and 3.5% in just the last quarter.
Matching this record breaking growth is the sales turnover from companies using asset based finance. Total client sales for 2013 have reached over £275bn, a growth of 10% year-on-year. In 2010 the total turnover figure was £211bn; this shows a cumulative current growth of 30 per cent in three years, underlining just how much asset based finance has supported UK and Irish firms with their sales growth since the financial crisis.
The quarterly sales figure of £72.7bn is also a record high, pipping last quarter’s figure by over £1bn and it is only the second time this has been over the £70bn mark for a single quarter. The export figures for both factoring and invoice discounting are also showing robust growth, with year-on-year increases of 18% and 12% respectively. This indicates that UK and Irish firms are successfully working hard to exploit sales opportunities worldwide that complement the economic recovery currently underway.
Apart from financing growth opportunities, the demand for asset based finance is also being driven for working capital needs. A new report from commercial payment system Sage Pay sees small and medium sized businesses (SMEs) being owed a staggering £55bn in unpaid invoices. This is even after the Government warned large corporations to make payments on time, but the problem is continuing, with two thirds of firms spending weeks attempting to secure payment for bills. This all underlines just how important factoring is to SMEs, allowing them to focus on actually running a business rather than chasing up unpaid invoices.
Kate Sharp, chief executive of the Asset Based Finance Association, commented: “Seeing record numbers for both funding and sales turnover makes a big statement that the asset based finance sector is performing really well, possibly the best it has ever done. It is providing the largest amount of funding ever to over 43,400 clients, which in turn is helping them to hit record amounts of sales, not only just in the last quarter but year-on-year and over the past three years. The sector is clearly one of the most important in supporting British and Irish SMEs, whether maximising new sales opportunities or managing the growing issue of late payment. It is extremely heartening to see these figures and we hope they continue to show such strong and persistent growth in 2014.”
