Despite the ongoing economic turbulence, latest figures from the Asset Based Finance Association (ABFA) and Finance & Leasing Association (FLA) have underlined the recent growth of the asset-based finance sector.
The pressure late payment is exerting on SMEs plays a leading role on the rocky path to recovery In addition, it is being widely reported that the larger and, typically, financially healthier businesses are the primary source of this grief for smaller companies
Business owners are only too aware of the endemic challenge of late payment and the role it continues to play in hampering the economys return to growth The situation is likely to worsen as the UK has slipped into the first double-dip recession since the 1970s.
Sustained attempts to stimulate the flow of credit to small businesses isnt working Much of the blame for the credit crisis has been laid squarely at the feet of the UKs financial institutions Many businesses argue that the tight underwriting frameworks adopted by the banks are preventing even the most viable of businesses from accessing urgently needed funding.
Much continues to be made of the UKs deteriorating credit outlook and businesses of all sizes, particularly SMEs, are finding it difficult to access funding to meet their day-to-day commitments and invest in their future. News that Project Merlin failed to have the desired effect in 2011 came as another blow, as did the latest Bank of England Trends in Lending report, which stated that traditional bank lending to businesses with a turnover of under £1m fell by 35% in the three months to November 2011.
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This time last year the term green shoots was seen widely in articles describing the latest economic news concerning the UK Conditions were largely seen to be improving and, although the recovery was set to be long and hard, there remained a sense of optimism that wed get there slowly but surely.
The Hilton-Baird Financial Solutions latest biannual SME Trends Index reveals that only 31% of respondents believed their business would expand over the next six months. The result is that many owners are cautious about investing in growth, preferring to horde cash for tough times ahead
Even with economic growth stagnating and UK businesses placing more emphasis on stability, asset-based finance (ABF) users have reported impressive growth in the last quarter This growth has been consistent over the past year, and highlights the benefits of such flexible forms of finance.
The latest quarterly statistics from the Asset Based Finance Association (ABFA) reveal that asset-based finance is currently providing a viable alternative to more traditional bank lending. The figures show that businesses turning over less than £5m (5.7m) which make up 84% of the 41,486 invoice finance clients are particularly benefiting from flexible funding solutions in the form of invoice finance.
The flexibility of targeted cash flow finance helps cash strapped businesses outperform users of more traditional forms of finance, writes Hilton Bairds Evette Orams Despite a more positive macro picture, it is an unfortunate fact that the financial health of many UK businesses has deteriorated during the six months leading up to April 2011 This is partly due to businesses being faced with a surge in operating costs and a fall in new orders, as suggested by the latest SME Trends Index from Hilton-Baird Financial Solutions.