UK businesses ahead of European peers in use of asset and invoice finance

British firms increasingly turning to alternative funding with asset finance accounting for 15.7% of UK GDP

UK businesses are leading Europe in the use of invoice finance and asset-based lending, according to latest figures from industry body the Asset Based Finance Association (ABFA).

Comparing British lending figures to other EU countries, ABFA reported that asset funding now represents 15.7% of UK gross domestic product (GDP), a marked increase on the European average of 8.5%.

This statistic is also much higher than the rates of lending in France where asset based finance accounts for 10.5% of GDP and Germany; 6.5% of GDP.

These findings correlate with news that July to September 30 2014 was the biggest ever quarter for asset based finance in the UK, with a record £19.3bn funding provided to UK firms.

Said to demonstrate how UK companies are “more rapid adopters of innovative financial products”, ABFA is calling on more small firms to use asset finance as “less risky and more freely available funding”.

ABFA chief executive, Jeff Longhurst, explained: “It’s clear that asset based finance is now the mainstream working capital alternative to ‘traditional’ lending.

“The use of asset based finance is rapidly growing throughout Europe not just because it has helped to fill the gap left by the reduction in traditional lending but because it is a superior product. It’s great to see UK businesses continue to be at the forefront of the expansion in the use of asset based finance.”

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