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The demand for invoice finance is continuing to grow, according to statistics
released by the FDA, which reveal that nearly £13 billion was advanced to UK
companies in the second quarter of 2006.
Over 45,000 companies now use invoice finance products, including factoring,
invoice discounting and asset based lending.
While users are predominantly in the manufacturing and services industry
sectors, there has been a 32% jump in retail organisations using invoice
finance.
Kate Sharp, chief Executive of the FDA, commented: "Each quarter we've witnessed
a growth in total sales and funds advanced and June results proved to be no
exception.
"It is particularly pleasing to see that we now have 137 companies with a
turnover greater than £1 billion using invoice finance as part of their funding
package.
"At quarter end companies within this bracket have been advanced £1.8 billion,
accounting for 14% of total funds advanced. "
Despite the 10% growth in large corporate organisations using invoice finance,
SMEs are still the predominant consumers of the product.
Quarter two has seen a surge in the number of companies with turnovers up to
£500,000 using invoice finance indicating a growth of start-ups.
Companies within this bracket account for around 40 per cent of the FDA's
members' clients.
Interestingly there has also been a 17% increase in funds advanced to companies
with a turnover between £10 million and £50 million, illustrating the increasing
appetite and appreciation of more established companies for the flexibility
provided by invoice finance.
The average number of debtor days outstanding for both factoring and discounting
clients has increased slightly to 59.3 and 58.3 days respectively.
Source:
Credit
Control Journal
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