Rarely has the phrase 'separated by a common language? been as pertinent as when looking at the sector that we in the UK call ?invoice finance and asset based lending?, and the rest of the world is reasonably content to simply refer to as ?factoring?. (In UK Finance we call it IF/ABL; other nomenclature used, however, includes ?asset based finance?, ?receivables finance?, 'sales finance?, or simply ?commercial finance?.)

There are of course often good reasons for the different terminology, with the products and services still largely defined by the specificities of property and company law at the national level.  In the UK ?factoring? specifically refers to the provision of finance combined with credit control; still a key product but second in volume now to invoice discounting which is generally undisclosed. Both factoring and invoice discounting are typically provided on the basis of debt purchase, hence the collective term ?invoice finance?, with asset based lending usually used to describe wider finance packages secured against debtor books and other business assets such as inventory, plant and machinery and so on.  

But the alphabet soup does not always help the wider understanding of an industry that in the UK supports businesses that together represent well over ten per cent of GDP (£280 billion in the UK in 2019 and over ?1.9 trillion in total across Europe).

This makes the World Factoring Yearbook - just published in its 24th edition and bringing together overviews of the sector in 39 countries around the world - an essential resource.  Indeed, with the UK seeking to 'turn its face to the world? following Brexit, the publication has never been more important in providing key information on doing business from Austria and Botswana to the USA and Zimbabwe.

UK Finance was pleased to contribute the UK's submission to the 2020 edition, which has just been published and is available to order here (https://bcrpub.com/publications/world-factoring-yearbook-2020-ukf).  In addition to the country reviews, the 2020 edition also includes a number of think-pieces considering the impact of Covid-19 on trade and financial services, including an insightful piece by Kevin Day, CEO of our associate member HPD Lendscape, on risk mitigation following the pandemic.