ABFA statistics for factoring and invoice discounting in 2011

This week saw the release of statistics for the factoring and invoice discounting markets for the final quarter of 2011 which meant that the picture for the whole of the year is now available.

It would seem that yet again the factoring companies made no overall progress with the number of companies using factoring and invoice discounting facilities hardly moving at all although the funding provided to them increased overall.

The most worrying figure though was the fact that the overall net gain of 408 clients was achieved by taking on 11,121 new clients and losing 10,713 clients in the same period.

The 10,713 clients lost in the period equates to one quarter of the total client portfolio at the end of the previous year and that is a truly worrying statistic.

Two figures that I would like to see revealed are the amount of fees levied overall to failed clients as termination fees and the amounts received by insolvency practitioners from failed factoring and invoice discounting clients as I have a sneaking suspicion that the amounts would be quite shocking

A representative of ABFA obviously struggling for something positive to write stated that “The new figures show that increasingly larger firms are choosing invoice finance because of both its inherent strengths and its availability. The overall figures are a strong endorsement of invoice finance and show that it continues to grow in popularity, not the least because firms which use it are able to grow and increase their turnover.”

I think that one of the main reasons why larger firms are choosing invoice finance is because their bankers are giving them no other opportunity as the banks’s own security position is much better with invoice finance rather than the traditional overdraft and I’m not sure that losing one quarter of clients and just about managing to replace them constitutes a growth in popularity either.