Industry body confirms Ultimate Finance is adopting the right strategy targeting smaller companies
According to the latest findings for quarter three by the Asset Based Finance Association (ABFA), funding to UK and Irish businesses secured against invoices and other assets has reached the £20bn for the first time ever; an increase of 4% on the same time last year.
The analysis shows that more than 80% of those companies using asset based lending have a turnover under £5m. Conversely, around 80% of the total advances are made to those with a turnover ranging from £5m to more than £100m.
Commenting on the figures, group sales director of Ultimate Finance, Nick Smith, said:
“Although it is tempting to concentrate all your efforts in targeting companies with a turnover of £5m plus as they account for around £15bn of the advances, less than 9000 companies in this category use this form of lending. Furthermore 40% of this figure is advanced to just 377 companies with a turnover of more than £100m.
“However an increasing number of asset based lenders are chasing this group exclusively, which is making it an extremely competitive and crowded market place.
“Although we can finance businesses with up to a £30m turnover, continuing to target those companies with a turnover of less than £5 million provides us with a great opportunity to write a large volume of business. While the level of the funding may be smaller, more than 35,000 companies were using an ABL facility in quarter three.”