The number of smaller businesses using asset-based lending has climbed by 3 per cent, with 15,000 companies with turnovers of under £500,000 now using the option.
Statistics released by the Asset Based Finance Association (ABFA) shows that total funding provided by the industry to clients has risen from £15.3 billion for the quarter ending March 2012 to £16.3 billion at the end of March 2013.
The industry has also seen totals sales form businesses using the products increase by 9 per cent to £63 billion.
Figures for small businesses using asset-based lending are the highest amount for nearly three years, ABFA says.
Kate Sharp, chief execrative of ABFA, comments, ‘It is extremely heartening to see so many of the smallest businesses choosing to use asset-based finance to fund their growth.
‘With some signs of confidence returning it becomes ever more important that firms can take advantage of the new opportunities that growth presents.’
The statistics come two weeks after the CBI and GE Capital launched a new guide to alternative forms of finance. Commenting on the guide, business secretary Vince Cable said that the government wants to see a shift in the market structure towards non-bank lending – and cited the government’s new business bank as an example of an alternative to bank credit.
More on asset-based lending:
Evette Orams, managing director of Hilton-Baird Financial Solutions, adds,
‘[The results are] in contrast to the Funding for Lending figures, published this week, which sadly once again show a contraction in traditional bank lending. It is however reassuring that tangible funding support mechanisms are available in the form of asset-based finance.
