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Invoice finance outperforms business lending

11 June 2011

Invoice finance outperforms business lending

Invoice finance dominated the UK business lending landscape with £14.8bn lent in the second quarter of this year, according to figures released by the Asset Based Finance Association (ABFA).

The total was a nine per cent increase on the £13.6bn lent to businesses through invoice finance by ABFA members in the second quarter of last year, and means that the product is now outperforming all other types of business lending in the UK.

Despite the uptake, businesses did not draw down the full amount of liquidity on offer from asset based lenders (£21.1bn) for the second consecutive quarter.

The average turnover of clients using invoice finance also increased to £5.27m at the end of the second quarter of this year, up from £4.36m in the second quarter of 2010, even though total client numbers have dropped slightly following the recession.

Kate Sharp, chief executive of ABFA (pictured), said: "Compared to all other major forms of business lending, asset based finance has grown the most, as both clients and lenders realise its inherent strengths in these unpredictable economic times."

The figures also revealed that finance through leasing and hire purchase grew by eight per cent in the last 12 months, as wider bank lending contracted by 2.5 per cent during the same time period.

Overall turnover growth for ABFA members grew by 15 per cent year on year, with total client sales in the quarter of £55.8bn.

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