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Peer2Peer Finance News | May 27, 2019

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Invoice finance continues to grow

Invoice finance continues to grow
Tim Evershed

INVOICE finance continues to grow as a means of business lending in the UK, according to analysis of the latest UK Finance figures.

Pure invoice finance reached £18.93bn as of the end of the fourth quarter of 2017, an increase of 0.25 per cent from the £18.88bn recorded at the end of the previous quarter, according to specialist outsourcer Equiniti Riskfactor, which delivers technology-enabled solutions to FTSE 100 companies.

The fourth-quarter figure was a 5.4 per cent increase from the £17.97bn recorded at the end of 2016.

“Usage of invoice finance continues to grow as per the latest quarterly UK Finance figures,” said Aaron Hughes, managing director at Equiniti Riskfactor.

Read more: Invoice finance: the business lifeline

“This method of business lending offers quick, reliable access to cash often on flexible terms while minimising the risks inherent in the cashflow systems of many small to medium enterprises such as late payments.”

The report found that invoice finance is the preferred method of business lending to small and medium businesses, particularly in the services sector.

The quarterly figures also continue show a close correlation with growth in UK GDP.

The UK economy grew by 0.39 per cent in the final quarter of 2017 and 1.42 per cent over the course of the year

Read more: MarketInvoice secures £100m of institutional funding for larger invoice finance deals

“While the balance of invoice finance did not grow as rapidly as it has in many quarters, it is reassuring to see that borrowing remains in correlation with the UK economy, ensuring that businesses and lenders are not over-stretching themselves,” said Hughes.

“We would expect to see borrowing surpass £20bn in 2018 as invoice finance continues to power small to medium enterprises in the UK.”

Read more: Brexit woes could hit invoice finance