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The demand for invoice finance continues to grow with the quarter two statistics released by the FDA today revealing that nearly £13 billion has been advanced to UK companies.
Over 45,000 companies now use invoice finance products, including factoring, invoice discounting and asset based lending. While these are predominantly in the manufacturing and services industry sectors, there has been a 32 percent jump in retail organisations using invoice finance.
In comparing results to June 2005, FDA analysis revealed:
- 16 per cent overall growth in total client's sales
- 2 per cent growth in domestic factoring
- 17 per cent increase in the use of domestic invoice discounting
- 105 per cent increase in the use of export factoring and
- 25 per cent increase in export invoice discounting
Kate Sharp chief Executive of the FDA said: "Each quarter we've witnessed a growth in total sales and funds advanced and June results proved to be no exception. It is particularly pleasing to see that we now have 137 companies with a turnover greater than £1 billion using invoice finance as part of their funding package. At quarter end companies within this bracket have been advanced £1.8 billion, accounting for 14 per cent of total funds advanced. "
Despite the 10 percent growth in large corporate organisations using invoice finance, SMEs are still the predominant consumers of the product. Quarter two has seen a surge in the number of companies with turnovers up to £500,000 using invoice finance indicating a growth of start-ups. Companies within this bracket account for around 40 per cent of the FDA's members' clients.
Interestingly there has also been a 17 per cent increase in funds advanced to companies with a turnover between £10 million and £50 million, illustrating the increasing appetite and appreciation of more established companies for the flexibility provided by invoice finance.
The average number of debtor days outstanding for both factoring and discounting clients has increased slightly to 59.3 and 58.3 days respectively.
To see the full results for quarter two, please visit www.thefda.org.uk/members/statistics.asp
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