Unlocking the Potential: Asset Based mostly Finance within the UK
Earlier this week, I loved a few days in Edinburgh attending the Asset Based mostly Finance Affiliation’s annual convention. ABFA represents the asset based mostly finance (bill finance and asset based mostly lending) trade within the UK and the Republic of Eire, and the convention is attended by a lot of the senior leaders within the trade.
As soon as once more, the difficulty being most debated was: How will we entice extra companies to the advantages of asset based mostly finance icopantera?
The bill finance market is rising, in fact – slowly. There at the moment are round 45,000 companies within the UK utilizing it, however to place this into some type of context it is estimated that over 400,000 companies are appropriate for this sort of funding and might be benefiting from it. We’re barely scratching the floor.
And it is even much less interesting to smaller SME’s, with lower than 1.7% of them funding their enterprise with a factoring or bill discounting facility.
So, why aren’t extra SME’s utilizing asset based mostly finance?
1. There aren’t sufficient advocates.
ABFA member analysis exhibits that 86% of purchasers utilizing asset based mostly finance are happy or very happy, however not sufficient of them are compelled to inform others about the way it advantages their enterprise. A contented shopper is an advocate and the trade must do extra to leverage this.
Too few skilled advisors, notably accountants, perceive and promote the advantages of bill finance & ABL. Till they do, we’ll by no means attain the various hundreds of SME’s that may very well be rising with our assist.