Factoring and invoice discounting recommended over overdrafts

20/08/2009

According to research carried out in June and July, which questioned financial advisors about their perception of the economy and business, found that 57 per cent of advisors are now likely to recommend invoice discounting as a solution to poor cash flow.

The survey found that 80 per cent of financial advisors said that clients had had their overdraft facilities withdrawn as a result of the credit crunch, while others have not been accepted for a overdraft facility in the first place.

Some 75 per cent of advisors said that some or all their clients had seen a reduction in the finance available to them over the past six months. Almost half of the advisors said they were now less likely to recommend bank overdraft facilities to business owners, instead claiming that factoring or invoice discounting is a better way to free-up much-needed cash.

The Asset Based Finance Association CEO, Kate Sharp, welcomes the results of the survey, “I am delighted that invoice finance is at last taking its rightful place as the first choice product for working capital funding. The flexibility of invoice finance and the dynamic relationship of the finance to business performance have always made it a superior cashflow product.”