Leading business finance providers, Bibby Financial Services today reports record rises in the number of small and medium sized businesses shunning the bank overdraft or loan in favour of invoice finance.
The rise and rise of alternative funding solutions for small businesses
More and more businesses are turning to alternative funding solutions such as factoring or invoice discounting according to new statistics from Bibby Financial Services, the UKís leading independent cash flow provider.
The firm increased the number of clients using invoice finance solutions such as factoring and invoice discounting, by 33 per cent in 2003, outstripping the market, which only rose by 6 per cent.
Increasing numbers of small and medium sized businesses are turning away from the more traditional forms of funding such as bank overdrafts and term loans and are using invoice finance as a means to improve their cash flow, raise funds for buy-outs and acquisitions, finance expansion plans and purchase new equipment.
As a result, the amount of money that Bibby Financial Services advanced to clients in 2003 increased by some 28 per cent, once again outperforming the market, which grew by 12 per cent.
The figures reflect the growing importance of invoice finance, described by many industry experts as the ìnew overdraftî. Further proof of the crucial role that invoice finance plays in the funding of UK businesses is the fact that the number of firms using bank overdrafts has fallen by over 20 per cent in recent years.
According to the latest figures from the Factors and Discounters Association (FDA), client turnover for the industry as a whole last year, totalled a massive 117.1bn, with the number of businesses using invoice finance rising to over 35,500. Total advances to clients now stands at 8.8bn, up 12 per cent year on year.
David Robertson, Chief Executive of Bibby Financial Services, said: ìAlthough the figures illustrate Bibby Financial Servicesí strong performance in the past year, it is also indicative of how much the invoice finance market is growing. Today, alternative funding solutions such as factoring and invoice discounting are seen as viable ways in which businesses can vastly improve their cash flow situation and fund further growth plans.
Small and medium sized businesses shunning the bank overdraft in favour of invoice finance.
More and more businesses are turning to alternative funding solutions such as factoring or invoice discounting according to new statistics from Bibby Financial Services, the UKís leading independent cash flow provider.
