UK asset-based lending drops off in 2012

The turnover of UK businesses using asset-based finance is up by 6 per cent on the first quarter of 2011 but down on the final three months of 2012.

First quarter statistics from the Asset Based Finance Association (ABFA) show that revenues of companies using asset-based finance fell from £62.3 billion to £59.2 billion on the previous three months.

However, the findings mark an increase on the first quarter of 2011 when only £55.6 billion was recorded.

Total advances have grown by 4 per cent to £15.4 billion on the beginning of 2011, despite a figure of £23 billion being available to those wishing to draw down on it.

The first three months of 2012 saw a net increase of 786 new users of asset-based finance, with the figure now standing at 41,989.

Speaking to GrowthBusiness back in May, Kate Sharp, CEO of ABFA said that companies were not as confident to borrow as providers were to lend. Final quarter figures for 2011 showed that £23.1 billion was available to UK businesses through facilities, with only £15.8 billion, roughly two-thirds of it, was drawn down.

The start of 2012 has now seen a drop in both the amount available for those wishing to borrow and the amount being utilised.

Speaking on the first quarter statistics, she says, 'The new figures also show a conservative approach to accessing funds from firms, with their appetite for new investment and maximising growth potential being muted.

'It does mean there will probably be missed opportunities.'

Evette Orams, managing director of Hilton-Baird Financial Solutions, comments, 'Given the current economic climate where the UK's small businesses are still struggling to find funding, it is refreshing that invoice financing is filling the funding gap.

Orams believes that the new figures from ABFA indicates that UK businesses have the 'financial fire power' available to succeed in 2012.

She adds, '[This] is good news for the economy and we hope to see an increasing number of seizing the opportunity in order to achieve growth.