The amount of invoice finance and other asset based finance provided to UK and Irish businesses is forecast to move past the £20 billion level in 2015, according to the Asset Based Finance Association (ABFA), the body representing the asset based finance industry in the UK and the Republic of Ireland.
The ABFA’s Annual Confidence Survey of its membership reveals that a record high of £20.8 billion is forecast to be advanced to businesses at the end of the year, up from £19.4 billion in December 2014, itself an all-time high.
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80% of this funding is expected to be provided through invoice finance, where businesses secure funding against the value of their unpaid invoices. The other 20% is expected to be delivered through wider asset based lending packages, where businesses secure funding against a range of assets they already own, such as stock, machinery or property, as well as against debt.
Jeff Longhurst, chief executive officer of the ABFA said: "Invoice finance and asset based lending are in pole position to become a leading alternative to traditional loans. That is great news for businesses. These are now established products that can support even more businesses, allowing them to unlock funding to pursue growth opportunities."
The 40 ABFA Members are also bullish about the number of businesses that will use asset based finance in 2015. Particular growth is expected in asset based lending, with ABFA members predicting client numbers to increase by over 20%. Numbers of invoice finance users are expected to increase more modestly by around 8%
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