Wilkins Kennedy LLP.

The continued rise of asset based lending


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Of those who do use alternative sources of finance, the most common form is asset-based lending.

CIMA has said that nearly three quarters of SMEs believe that banks are starving businesses of credit and that more than half are holding back on investment decisions and hiring staff because of trouble with lending. However, 99% have avoided payday lenders and 37% do not use alternative sources of funding at all. Of those who do use alternative sources of finance, the most common form is asset-based lending.

It is encouraging to note that the most common form of alternative finance is asset based lending and that SME’s recognise that the different faces of asset based finance whether invoice discounting, factoring or specialist products such as construction finance and recruitment finance provide a flexible and dynamic form of finance.  The advantages of asset based lending are clear especially when faced with cashflow problems caused by late payments.

According to data from Experian large companies are taking even longer to pay their suppliers than a year ago. UK companies employing more than 500 people paid their bills an average of 34.19 days late during the second quarter of 2013, compared with 30.91 days late a year before. The slowdown comes despite Government attempts to encourage corporations to tackle the culture of late payments. The Federation of Small Business has said the issue of slow or late payment is one of the "biggest challenges for small firms".

The CBI, supported by GE Capital, has launched a guide to sources of alternative finance to help SMEs.

Kate Sharp, CEO of the Asset Based Finance Association (ABFA), commented recently on the CBI’s guide to sources of alternative finance:

“Businesses need help understanding the finance options that are out there and this report is a welcome step forward to that. The government and bodies like the CBI are doing a great deal to support ‘non-traditional’ forms of commercial finance and we welcome their efforts. The asset based finance industry has an important role to play in supporting even more businesses going forward and we look forward to delivering on that potential”

At cash-flow.co.uk we will help you make the right choices by matching your business to the most suitable business finance facility and lender whether its invoice discounting, factoring, or asset based lending.

For a free no-obligation cash flow finance consultation, simply complete the form and we will contact you. Alternatively, please call our dedicated cash flow contact centre free of charge on 0800 019 4251 and you will be put directly in touch with an experienced member of our team.

 

 

We can help your business release cash tied up in invoices, property, plant, machinery, stock and a range of other business assets.

Proven cash flow finance solutions such as invoice discounting, factoring, asset based lending, recruitment finance and construction finance release substantial funds immediately. Let us compare the market to find you the best business finance deals.

Cash flow is a critical resource - the fuel for your business. Without it, your business plans grind quickly to a halt.

With a strong cash flow, your business has momentum and can sustain rapid growth.

You can see the market opportunities and you know you have the skills to take advantage of them. If only cash flow wasn’t holding you back.

Find out more about cash flow finance solutions and our outsourcing service which provides payroll and bookkeeping services for your business.

For a FREE NO OBLIGATION QUOTE simply complete the form or call our cash flow contact centre free of charge on 0800 019 4251 to realise your potential for growth.