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Rising numbers of UK businesses are turning to invoice finance as the means of funding growth according to the latest statistics released by the Factors and Discounters Association (FDA).
The invoice finance industry is now worth more than £148 billion, an increase of more than 10 per cent on 2004 figures.
Last year, around 43,000 businesses in the UK were advanced over £11 billion by FDA members, with SMEs accounting for 99% of clients using invoice finance.
In the past decade of results found that, the invoice finance sector grew by 460% cent and domestic invoice discounting by 609%
Factoring use has grown by 132% per cent.
Kate Sharp, Chief Executive Officer of the FDA, commented: "Just ten years ago
only 13,000 companies in the UK used invoice finance but now this has increased
to 43,000.
"We can attribute this success to the growing awareness of the flexibility
offered by invoice finance products, which can grow in line with a business'
working capital requirements.
"No longer are businesses restrained by the inflexibility of traditional
funding means. They can utilise the working capital tied up in unpaid invoices
to finance their growth, whilst also taking advantage of the credit protection
offered by invoice financiers as a way to safeguard future profits.
"Our figures show that the use of invoice finance peaks when businesses are
starting up and then again when the company's turnover passes the £1 million
milestone.
"Increasingly we are also seeing large corporate organisations turning to
invoice finance, particularly confidential invoice discounting which allows them
to retain control of their sales ledger."
Over the past 10 years the use of export invoice discounting has increased by £4
billion as more UK businesses seek new opportunities in overseas markets.
Source:
Credit Control Journal
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