Record rise in use of asset based finance


Asset based finance, a finance solution that enables businesses to advance funds against the value of a variety of assets, has been growing in popularity – particularly since the credit crunch.

New figures from the Asset Based Finance Association (ABFA) have revealed a new record in the volume of funding provided by the likes of invoice finance, factoring and invoice discounting in the UK market.

During the final quarter of 2016, £22.2 billion was advanced to the sector’s clients, which represents a 13% year-on-year increase.

Why has popularity grown?

According to the ABFA, the primary reason behind this rise in popularity is the gradual movement away from traditional funding such as overdrafts and bank loans.

As awareness increases, businesses seize growth opportunities and finance new projects and merger and acquisition activities, asset based finance has proved a popular option due to the additional benefits it provides.

Another factor affecting these results could be the UK’s pending exit from the EU, as a 7% quarterly rise in borrowing was recorded in Q4 2016 as businesses seek a ‘cash cushion’ due to economic uncertainty.

The figures

The ABFA revealed that 80% of all asset based finance is made up of invoice finance, which sees funders release up to 90% of an invoice’s value within 24 hours of it being raised. (Download your ultimate guide to invoice finance here).

The other 20% accounts for asset based lending, whereby funds are released against the value of other business assets, including plant, machinery, property and other business inventory.

M&A transactions

Interestingly, the last few years has seen an increase in use amongst the UK’s larger businesses. This is enabling them to fund growth through merger and acquisition activity. Overall usage amongst larger firms has increased from £6.7bn to £8.1bn in the year to Q4 2016, an increase of 21%.

A solution for all

Asset based finance is clearly shown by these figures to be benefiting businesses of all shapes and sizes. So why are businesses continuing to ditch their loans and overdrafts in favour of it?

Jeff Longhurst, Chief Executive of the ABFA has commented: “Asset based finance is already well used among SMEs, but now larger businesses are well aware of the opportunities it provides them. Being able to release the value in a target company’s invoices can often be the critical factor in an acquisition.

“All sizes of UK businesses need to be aware of the possibilities and opportunities that asset based finance can provide them beyond what traditional sources can offer them.”

Read how Hilton-Baird Financial Solutions helped this business find the best facility to support their cash flow as they took on new orders.

If you would like to find out more about asset based finance, our team will be able to discuss the ways in which your business could benefit. They can be reached on 0800 9774833 or emailed at


Some of the funders we work with

  • Optimum Finance
  • Lloyds Bank Commercial Finance
  • Partnership Invoice Finance
  • Metro Bank SME Finance
  • ABN AMRO Commercial Finance
  • MaxCap
  • eCapital Commercial Finance
  • Tradeplus24
  • Kriya
  • Aldermore Invoice Finance
  • Regency Factors
  • Clear Factor
  • IGF Invoice Finance
  • Berkeley Trade Finance Ltd
  • Blazehill Capital
  • Merchant Money
  • Giant
  • Praetura Invoice Finance
  • Barclays
  • Davenham Asset Finance
  • Peak Cashflow
  • Cynergy Business Finance
  • Ultimate Finance Group
  • Santander Corporate & Commercial
  • Castlebridge
  • Time Finance
  • 4Syte
  • Woodsford Tradebridge
  • Haydock Finance Ltd
  • Roma Finance
  • Skipton Business Finance
  • Close Brothers Invoice Finance
  • Royal Bank of Scotland
  • Nationwide Finance
  • Davenham Trade Finance
  • Investec
  • InvoCap
  • Leumi ABL
  • Pulse Cashflow Finance
  • Sonovate
  • Team Factors
  • PNC Business Credit
  • Accelerated Payments

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