The UK government has been urged to support the growth of the invoice finance and asset-based lending sector in 2018 after newly-released figures revealed that demand reached record levels last year.
Data released by UK Finance shows that total sales (turnover) of clients supported by invoice finance and asset-based lending are up 4% for UK clients, standing at £214 billion for the first three quarters of 2017.
Total advances (the amount of funding being provided to clients at the close of the most recent quarter) were up 13% year-on-year to a record level of more than £22 billion for UK businesses.
Client numbers remained stable at just over 40,000 UK clients.
The data revealed that the exporting picture is particularly strong, with sales from clients through export invoice discounting facilities up 33% year-to-date for Q3 2017 and export factoring up 11% over the same period.
Matthew Davies, director, invoice finance and asset-based lending at UK Finance, said: “There is increasing understanding amongst businesses of all sizes of how invoice finance and asset-based lending can support them as they grow, and it is particularly encouraging that a substantial proportion of the sustained increases in lending we’ve seen in recent months is helping boost UK exports.
“More funding could and should be provided through invoice finance. To unlock this, the government should bring forward long-awaited legislation to give more smaller firms, in particular, access to much-needed capital.”
So-called ‘ban on assignment’ clauses are sometimes imposed by larger businesses on their smaller suppliers and can restrict the finance options available to those supplier businesses.
To address this, the UK Government is expected to bring forward revised Business Contract Terms (Assignment of Receivables) Regulations.
UK Finance represents the finance and banking industry operating in the UK, with around 300 members providing credit, banking, markets and payment-related services.
The new organisation brings together activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.