UK companies using factoring and other asset-based finance methods turned in an exceptionally strong financial performance in the last quarter of 2013.
The Asset Based Finance Association (ABFA) has released Q4 2013 figures that show the highest-ever quarterly funding balance and record annual sales turnover for companies using asset-based finance.
Total funding advances to clients reached a record-breaking £18.3 billion for the period, an increase of 11% over the previous year and 32% since the end of 2009. Meanwhile annual sales turnover from companies using asset-based finance topped £275 billion, an increase of 10% over the previous year and 30% since 2010.
These figures demonstrate the importance of factoring, invoice discounting and other asset-based finance methods in helping British and Irish firms pull through the difficult recent years and position themselves for post-recession growth.
Factoring generates working capital
In addition to financing growth opportunities, the demand for asset-based finance is also being driven by the need to generate working capital. A new report reveals that UK firms are sitting on a staggering £55 billion in unpaid invoices and two-thirds of those firms spend weeks on average to collect overdue payments. The ABFA points out that these figures underline the importance of factoring to SMEs, providing the largest amount of funding ever to more than 43,400 clients and allowing firms to focus on running their businesses rather than chasing invoices.