Close | 
Top
The asset based finance industry continues to grow despite the severe downturn in the economy. During 2008, the sector far exceeded expectation and at the end of the year was advancing in excess of seventeen billion pounds to UK businesses.
End of year results from the Asset Based Finance Association (ABFA) show that the industry is worth £208,014 million, a growth of nine per cent on last year’s figure of £191,401 million. This form of finance, which allows companies to release liquidity tied up in assets, has undergone rapid growth recently and is growing faster than general lending.
While the majority of advances are against debt, such as sales invoices – the latest figures highlight that advances against stock are on the rise. Over £1,603 million, an increase of 168 per cent on 2007’s, was advanced to companies during 2008.
The falling pound also continues to effect UK businesses. The use of export invoice discounting jumped by 34 per cent during 2008 indicating that more businesses are looking overseas in order to find new contracts, perhaps in an effort to move away from the slowdown in the UK.
Kate Sharp, chief executive officer at the ABFA, said: "It is no surprise that as a result of the tightening credit market, more and more companies are using their assets to their advantage. Despite limited liquidity elsewhere, the asset based finance industry has proven its resilience and has shown that it can continue to grow in tough economic conditions. More importantly, our members have given UK companies who have experienced tightening lending conditions a lifeline."
The
sector split for clients using asset based finance is evenly split between manufacturing
and services indicating its broad appeal to the business community.
To view the full report on the statistics for Quarter Four 2008 please click here.