Key data highlights:

  • Growth in overall advances to clients was up four per cent year-on-year
  • There was particularly significant growth in wider asset based lending facilities (11 per cent year-on-year), driven by funding advanced against stock
  • Client numbers were marginally up (one per cent) but total client turnover within Q1 was down year-on-year

Commenting on the data, Stephen Pegge, Managing Director, Commercial at UK Finance said:

“Invoice finance and asset based lending by UK Finance members showed solid growth in the first quarter and stood at almost £22 billion, up four per cent on 2017.

“Members are reporting particularly strong growth in asset based lending facilities, showing that as well as funding against invoices, client businesses are increasingly accessing wider finance facilities secured against stock.

“Conversely, total client sales are down compared to the same period in 2017, reflecting subdued economic growth in the first quarter.”

Notes to Editor

  1. For more information please call the UK Finance press office on 020 7416 6750 or mail press@ukfinance.org.uk.
  2. UK Finance is a trade association formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.
  3. “Invoice finance and asset based lending are forms of finance provided to client businesses against the assets of the client. For many businesses, particularly small and medium-sized businesses, the debtor book will be one of the most significant assets they have. Invoice finance (factoring and invoice discounting) allows businesses to release the working capital tied up in the debtor book. In addition to providing finance against debt, an asset based lending facility can be used to provide a broader mix of funding, including revolving and amortising structures against the entire range of business assets. These can include inventory, real property, plant and machinery, and also against intangible assets such as brands and forward income streams.
    Invoice finance and asset based lending are now used by client businesses of all sizes and across most sectors of the economy. The industry in the UK is diverse; these forms of finance are provided by the large UK banks, international, specialist and challenger banks, as well as by a range of non-bank specialist finance providers. At any one time, the sector will be providing over £20 billion of funding to clients, and in 2017 UK Finance’s IFABL members supported clients with a total turnover of around £290 billion.”
Attachments
Businesses’ asset based funding rises four per cent in Q1 2018