UK Finance figures show that the balance of pure invoice finance has grown from £18.6 billion at the end of Q2 2017 to £18.9 billion at the end of Q3. This marks record lending levels from UK businesses and shows sustained annual growth of 14%.
There is a ‘close correlation’ between the growth of invoice finance lending and rising UK GDP, according to Equiniti analysis.
The balance of invoice finance plus – which allows for advances against debt plus other assets – totalled £324 million at the end of Q3 2017, an annual rise of 33%.
A number of invoice financing firms have driven growth in the invoice finance and asset-based lending sector. Global electronic invoicing firm Tungsten Network Finance announced its total originated invoice outstandings have reached a record £54.5 million. This is up from 89 per cent of £28.8 million in October last year.
Despite the positive figures, there are concerns about how negotiations over Brexit will affect invoice finance levels, with research from tech services company Equiniti showing a connection between the confidence of businesses when borrowing and economic fluctuations in the UK. Figures from the analysis showed declines in GDP growth have had a knock-on effect on the confidence of businesses when it comes to invoice borrowing.
Commenting on UK Finance’s figures, UK Finance Director of Invoice Finance and Asset-Based Lending Matthew Davies said there is increasing understanding among businesses of all sizes of how invoice finance and asset-based lending are able to support them as they grow. It’s encouraging that a significant proportion of the sustained increases in lending recently is helping to boost exports.
However, he added more funding could and should be provided through invoice finance, and called for the UK Government to bring forward long-awaited legislation to provide smaller businesses in particular with access to much-needed capital.