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Statistics from the Asset Based Finance Association (ABFA) show that the
industry has advanced a record breaking £16.2 billion in quarter one of 2008.
While advances continue to grow year on year and client numbers remain steady,
other figures reflect the more 'protective' stance firms are taking during
today's turbulent economy.
The first quarter report reveals that the industry is worth more than £48
billion already this year, and where other finance industries are facing
problems in the wake of the credit crunch, the asset based finance industry is
holding its own.
Though client numbers have dropped 4.9 percent from last quarter, advances
continue to increase showing that companies using a form of asset based finance
continue to grow.
Signs of the credit crunch are evident within the statistics with a 15% increase
in the values of credit protection payments to clients.
UK businesses that have been prudent and shielded themselves from others bad
debt or misfortunes are now reaping the benefits.
A sign of tough internal UK trading can be seen in terms of the finance
products.
Export invoice discounting has experienced a 25% growth in client sales volumes
on this time last year, followed by export factoring with 14%.
Import factoring has seen the biggest increase in client numbers in the first
quarter, with a 6% increase, while domestic invoice discounting reports a 5%
increase.
Kate Sharp, CEO of ABFA explained: "Even in these worrying financial times, the
asset based finance industry continues to go from strength to strength.
"The quarter one statistics give us a good snap shot of the economy; increased
credit protection payments are indicative of higher levels of corporate failure
with the increase of export and import finance signalling difficult UK trading.
"In times of toughened borrowing and trading we expect to see more companies
turn to using their business assets to raise or release finance. It will be
interesting to watch how the rest of the year unfolds."
Source: Credit
Control Journal
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