ABL down but Invoice Discounting Maintains Growth

The asset based finance industry has revealed an unexpected fall in total finance provided to businesses in its latest quarterly statistics. The tightening of the ABL market reflected the overall decline in UK corporate activity and the figures highlighted that there are still significant funding lines open to companies.

Total sales were £45.7bn in the three months to March 2009, a drop of seven per cent compared to the same period in 2008. Total advances to companies was also down to £15.1bn, falling eight per cent from last year.

Advances against business stock rose significantly, by 96 per cent, and export invoice discounting also maintained growth, showing a solid seven per cent increase, continuing the trend for firms to look overseas for additional business opportunities.

Export Invoice Factoring was down just one per cent in the first quarter to £397m, while import factoring showed the largest drop of 34 per cent to £273m from £413m in March 2008. Domestic invoice financing fell six per cent from £41.3bn in March last year to £38.9m this year.

Asset Based Lending figures compare favourably to other traditional funding routes. For instance consumer lending showed a 12 per cent reduction and new figures from the British Bankers’ Association also showed significant falls in high street bank lending to UK businesses.

Asset based Lending provided funding streams for 48,000 UK and Irish businesses and is still advancing in excess of £15bn.

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