MBOs boost invoice finance sector

06/03/2008

The growth of management buyout (MBO) activity in the UK in recent months has given a significant boost to the invoice finance sector, it has been suggested.

MBOs involving firms looking to expand rapidly have helped debtor finance businesses buck the downward trend of the financial sector as a whole, according to the latest data from the Asset Based Finance Association (ABFA).

The ABFA has reported that its members' activity is now worth in excess of £191 billion on an annual basis, having doubled in scale since the beginning of the decade.

Furthermore, 2007 saw invoice discounting activity grow by 12 per cent, while the UK's domestic factoring sector increased in scale by around six per cent compared with the previous year, Creditman reports.

"Our members have proven to be a lifeline to UK companies who have experienced tightened lending conditions and needed alternative sources of funding to sustain growth," said Kate Sharp, chief executive of the ABFA.

The ABFA was established in 1996 and the organisation describes its role as representing asset-based businesses that provide British firms with "much needed liquidity".