Asset-Based Funding to UK Businesses Hits Record High

UK and Irish small and medium firms have raised £20bn against assets and unpaid invoices this year

Asset-Based Funding to UK Businesses Hits Record High

Asset-based lending to small and medium businesses in the UK and Ireland hit a record £20bn – up 4% from last year’s £19.3bn – according to a report by the Asset Based Finance Association (ABFA).

While the number of firms raising finance against assets such as inventory, property, and intellectual property has grown, invoice finance remains the most popular option; accounting for 80% of the total amount of asset-based investment secured.

According to the ASFA’s report, this growth in asset-based finance comes from the increase in the number of firms borrowing against unpaid invoices, which frees up cashflow and involves less ongoing restrictions than lending against ‘traditional’ products.

Overall, asset-based and invoice finance has experienced a year-on-year increase of approximately 4% since 2009’s £13.9bn.

Jeff Longhurst, chief executive of the ABFA, commented:

“UK businesses are keen to invest for growth and are looking to their existing assets to unlock the funding they need to achieve it.

“More and more businesses see unpaid invoices, plant and machinery as a potential source of finance rather than an impediment to cash flow. In addition, with asset based finance, the funds available track the growth in the business so senior management can focus on what they do best – running the business.”

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