Company financing bucks borrowing trend

25/01/2008

Company finance deals have bucked the general downward trend of borrowing activity in the UK, according to the latest data from the British Bankers' Association (BBA).

Unlike the figures for both consumer and mortgage borrowing, the level of debt taken on by businesses around the country in December of last year rose considerably and was above the average for the previous six months.

Many companies with cashflow concerns turn to factoring or invoice discounting to fund their activities but December was a particularly busy month for more traditional business borrowing, according to the BBA.

In fact, over the course of last month, the level of company borrowing rose by around £10 billion nationwide, which out-paced six-month average growth rate by almost £1.9 billion.

Earlier this week, Alison Small from the City Invoice Finance company told the Manchester Evening News that an increasing number of small firms are using invoice financing as a "creative" way to solve their funding problems.