Increase in export invoice discounting reflects brightening UK trade picture
The latest statistics from the Asset Based Finance Association (ABFA) reveal a sharp increase in the number of businesses using export invoice discounting in the final quarter of 2010, indicating that firms are beginning to seek out new trading opportunities in international markets.
The trade body for all factoring and invoice discounting facilities reported an increase of 39% for Q4 2010 to the same period in 2009. The news comes at a time when the Office for National Statistics (ONS) is reporting the UK trade deficit has shrunk to the narrowest margin since February last year, adding further strength to the state of the UK export market, as Andrew Bullard, head of business at leading invoice finance broker Cashflow UK explains:
“The findings from ABFA highlight the increased activity of UK firms who have already sourced the appropriate funding to enable them to take advantage of overseas opportunities thereby enabling them to grow. We all know that the coalition government is striving to provide a platform for small and medium-sized businesses to compete in international markets, and it is therefore encouraging that invoice financiers are able to help these businesses when they are looking to expand their horizons.
“The weakening value of the pound has handed an advantage to UK exporters giving them a competitive edge. With Deputy Prime Minister Nick Clegg recently announcing that the only way to keep Britain moving towards a recovery is to build an economy on enterprise, investment and international trade, it must be hoped that the recent upturn can be maintained long-term to help aid a full recovery.
“Despite the Government’s efforts to increase lending to small businesses through the ‘Project Merlin’ deal agreed with the leading UK banks, access to finance remains a serious issue. Last month the British Bankers’ Association reported that lending to private non-financial companies – the backbone of British businesses – rose by £0.6bn in February. While this is an improvement on the £0.3bn decline seen in January, the fact of the matter is small and medium-sized companies are not seeing the necessary improvement in credit conditions.
“With this is in mind, it is evident even more can be done to support those businesses looking to develop international growth plans with not only the cash flow, but if necessary the unique facilities available from specialist export finance providers that ensures businesses are able to operate and compete confidently around the globe.
“Export invoice discounting and export factoring solutions provide comprehensive funding packages offered based on the value of invoices raised. In addition, many export factoring providers offer additional benefits such as providing businesses with a team of experienced, multi-lingual staff, that will chase and collect outstanding customer invoices, eliminating the frustration and hassle of dealing with any cultural or communication barriers.“
Cashflow UK is a leading finance brokerage specialising in factoring and invoice discounting and its specialist team of financial experts are able to offer impartial advice and find your client the best provider to match their needs.
