Not surprisingly, asset based lending and invoice finance are becoming increasingly popular with the SME community as an alternative to traditional bank loans.
According to the latest report from the Asset Based Finance Association (ABFA), £18.9 billion in loans were given to businesses between April and the end of June. Asset based lending and invoice finance is up 10% from last year, with the majority of SMEs opting for the latter.
Chief Executive of ABFA, Jeff Longhurst, said “We are seeing more and more businesses of all sizes and types taking advantage of invoice finance to fuel their growth, particularly as more traditional forms of lending remain subdued”.
Longhurst further commented, “What’s becoming increasingly clear is that asset-based finance such as invoice finance in particular, is the alternative to traditional lending for SMEs that the Bank of England and the Treasury have been looking for.”
Alternative lending, including peer-to-peer loans and crowdfunding, is definitely here to stay as SMEs struggle to find the funding they need. More competition for banks can only be a good thing.