Invoice discounting industry is booming

07/07/2008

As many business sectors are tightening their belts in the wake of the credit crunch, the invoice discounting industry is enjoying roaring trade.

Among figures published by The Asset Based Finance Association (ABFA) in their first quarter report is the revelation that export invoice discounting has experienced a 25 percent growth in client sales volumes on this time last year. Export factoring has also experienced growth at 14%.

Client numbers across the invoice discounting sector are largely steady, but import factoring has seen client number growth of six per cent. Domestic invoice discounting is a close second, with a 5% increase in client numbers.

It's not just invoice discounting that appeals to firms when liquidity is tight: other methods of releasing finance are also proving popular. While borrowing against debt is still the most common way to raise funds, there has also been a 27% increase in advances against assets.

Security values on balances advanced against stock has jumped 96 percent from Q1 2007 to stand at £739 million with security values in property increasing by 27 percent equating to £595 million.