Asset Finance Providers Continuing to Support Growth

Posted on 03.12.2013, by Rob Warlow

When dealing with clients looking to raise finance or in the seminars we run it’s surprising how many business owners are only just beginning to realise that Asset Based Finance is a growing source of alternative finance.

The sector supports growth by financing asset purchases via leasing, hire purchase and unlocking cash through invoice discounting and factoring.

The latest figures for the three months to September 2013 from the Asset Based Finance Association (ABFA) have shown that the industry and its clients are continuing to perform strongly.

At the end of September members of the ABFA had total advances out to its clients of £17.4 bn, which is 6% up on the same period in 2012 (£16.4 bn). This is only the fifth time the funding balance has been above £17 bn and this demonstrates that the demand for asset based finance is strong and growing with firms increasingly using it to fund growth and their working capital requirements.

This growth contrasts with that of the wider finance market where bank lending continues to contract at the rate of approximately 3% per annum.

ABFA has also looked at how those businesses using asset based finance have performed; total sales from those businesses broke £71 bn for the third quarter, the strongest ever quarterly performance. This is up by some 14% on the same period last year.

There is a myth that asset based finance is more for larger businesses but the industry does support smaller businesses, with almost 15,000 of the over 43,000 clients being found in the £0 – 0.5 m turnover bracket, and over 30,000 in the sub £5 m bracket.

In terms of sectors they support, asset based financiers are most active in the services (30%), manufacturing (29%), distribution (24%), transport (7%) and construction (5%) sector.

If you are planning for growth check out how asset based finance can support your plans… it’s all about diversifying your funding sources.

Check out the video below on how buying assets via an asset finance facility can work for you.


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