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Asset-based finance to break last year’s record

The funding to UK and Irish businesses based on assets is expected to top £20 billion in 2015, surpassing last year’s record-breaking figures, according to the Asset Based Finance Association (ABFA).

The ABFA’s Annual Confidence Survey suggests that £20.8 million of asset-based finance will be advanced to businesses by the end of the year – an increase on last year’s £19.4 million raised in this sector.

ROUTES TO FUNDING

Of the 2015 funding, 80% is forecast to be raised through invoice finance, while the other 20% is expected to be borrowed through wider asset-building funding. Invoice finance involves firms borrowing against the value of their unpaid invoices, while the asset-building funding comes from cash raised against existing assets such as stock, machinery and property – as well as against the company’s outstanding debt.

There is high confidence among ABFA members about the wider economy, with around 73% expecting to see conditions improve. The other 27% expect the situation to remain stable.

ALTERNATIVES TO TRADITIONAL LOANS

ABFA CEO Jeff Longhurst told growthbusiness.co.uk that asset-based finance is in pole position to become a leading alternative to traditional loans”.

“Invoice finance is already widely recognised by firms as a quick and straightforward way to leverage the underlying strength of their business, unlocking funding to grow.

“SMEs in particular are seeing the value of converting their unpaid invoices into ready capital for investment, whether they need to hire new sales staff, expand their premises, buy new tools and equipment or focus on R&D.”

The financing option is growing popular for companies which see the benefits of using their existing assets as security.

“That security allows them to access business finance they might not otherwise have got.” he said.

BIBBY FINANCIAL SERVICES

As the UK’s leading independent invoice finance specialist and a trusted provider of cashflow funding to over 7,000 businesses, Bibby Financial Services provides a range of finance solutions for companies in over 300 industry sectors.

For more information about Bibby Financial Services’ cashflow solutions, visit: www.bibbyfinancialservices.com or call 0800 91 95 92.

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