Finance and Accountancy Briefing

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Funding an SME-led recovery


SMEs account for 51 per cent of the UK’s economic output and 59 per cent of employment in the private sector – their needs cannot be ignored.

Our report suggests close to 650,000 firms across the UK sit within sectors suitable for commercial finance – a term that covers asset-based lending (ABL), including invoice discounting.

Simply put, ABL allows companies to draw money against assets such as trade receivables, stock and machinery.

The 650,000 firms account for an estimated £8.8bn of the UK’s SME lending gap, which stands at an estimated £28bn, according to CEBR.

However, the trade body for the ABL sector – the Asset Based Finance Association (ABFA) – states that its members are servicing only a small fraction of potential clients – just over 41,000 SMEs (including factoring).

Our view is that in order for ABL and invoice discounting to grow market share and contend with the banks, the industry must continue to respond with flexible, efficient and creative solutions.

To read more, please download the full report now.

Tags: Banking, Economic Climate, Invoice discounting, SME, Small Businesses, Asset based finance.

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