Asset based lending drops
Article Date: Jun 04 2009According to industry body the Asset Based Finance Association, asset based lending has fallen since last year.
Total client sales were £45,667 million, a drop of seven per cent from March 2008, with total advances to companies down to £15,057 million, down eight per cent from last year.
Kate Sharp, chief executive of the ABFA, says: ‘Asset based finance is still providing funding streams for 48,000 UK and Irish businesses and is still advancing in excess of £15 billion. While these figures do show a drop in overall lending, this is entirely to be expected in light of the fall in overall UK business activity, as firms downsize and change their business strategy.’
However, according to the figures advances against stock rose by 96 per cent, and export invoice discounting also maintained growth, showing a seven per cent increase.
Prehaps the reason for this drop is that Asset Base Finance companies have increased their charges sharply, implemented / imposed minimum base interest rates (often at or above 3%) and ALSO require personal guarantees from directors on supposedly secure assets.
Report this comment »These numbers are only going to decline as SME's either decide that this is too expensive a route to financing or are driven out of business because they are unable to meet increasing harsh demands from their supposed finance 'partners'.