Factoring statistics

NACFB funding statistics including factoring

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NACFB has issued a press release stating that a recent survey of it’s members showed that asset finance and leasing funding doubled in the last year to £2billion whilst invoice finance declined very slightly.

Whilst many of the more active brokers in the factoring and invoice discounting fields are not members of NACFB and therefore their own figures have not been included, the general trend does seem to be borne out by the ABFA statistics.

The NACFB’s Chief Executive, Adam Tyler, commmented: “We have continued to see the SME community struggling to raise funding and being faced with increased costs.”

“Despite many lenders’ protestations that they are lending more than ever, these figures reveal what anecdotal evidence has already shown: that funding for businesses is still hard to access, but it has improved if you know where to look.”

These sentiments are not unusual and the alleged difficulty in raising funding for the SME sector has been mentioned quite frequently.

Whilst overdraft funding is more difficult to arrange than in the past the vast majority of invoice finance lenders are finding the opposite problem as they are all actively looking for customers but it’s the customers who are few and far between as it seems that companies just don’t want to commit themselves to funding for expansion.

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Factoring – market shares

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Yet more factoring statistics have landed across my desk, this time with the client numbers and turnovers split down by individual factoring companies and interesting reading they make too.

I have only looked at pure factoring figures as I believe that the stats including invoice discounting are heavily skewed by the small number of extremely large companies that have been included.

In terms of client numbers the factoring subsidiaries of the big four banks have 66% of the total clients but Bibby Financial Services with just over 20% market share in terms of client numbers is way ahead of any other independent leaving the remaining couple of dozen other independents scrapping over a 14% share.

Factoring and invoice discounting review of 2011

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I guess that it’s been pretty much the sort of year that we all expected, with the factoring industry as a whole pedalling hard just to stand still.

According to the ABFA statistics the total number of companies using factoring and invoice discounting at the end of September was 41,572 which was a net increase of 61 since 1st January.

Interestingly the factoring industry took on 8,000 new clients in the period but lost a similar amount. It’s normal that quite a few of the new factoring clients are phoenix’s of existing clients but my understanding is that less and less companies have risen from the ashes this year.

Stats for the final quarter of the year won’t be out for a few months yet but chatting to other brokers as well as factoring companies it seems that the final quarter has been even more of a struggle with enquiries down and companies taking longer and longer to decide what they want to do anyway.

Over at Factoring Solutions we aren’t bucking the trend with our enquiry levels down on last year but oddly enough we have had quite a good year as the quality of enquiry has been higher and we are getting a higher proportion of deals away even if the lead time is getting longer and longer. In November two different factoring companies both paid away decent deals that first arrived on the scene 18 months ago before prevaricating like mad for a year and a half and finally signing on the dotted line when we had all but given up on them.

I am frequently asked why I haven’t blogged as much this year and the honest answer is that there has been very little to blog about. No factoring companies have gone bust, no new ones have started up and there isn’t much tittle tattle to write about. I notice that a few of my broking competitors have now started to blog but with the best will in the world their efforts seem to be designed to try and boost Google rankings rather than to be read by human beings as the articles seem to be the same “what is factoring” article rehashed every month whereas this blog is actually designed to be read by factoring people and I won’t post just for the sake of it.

There are one of two stories that I have deliberately not run with as most industry insiders already know about them whilst I can’t see it being in the public interest to bring them to a wider audience and to those readers who email me complaining that I haven’t published their responses I would remind you that this is a personal blog and not a forum.

There is just the one rumour lingering that has been around for the best part of the year concerning the supposed take-over of one particular factoring company and I have been told in the strictest of confidence from several sources that the buyer is – a different company each time 🙂

Interesting factoring statistics from the ABFA

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The Asset Based Finance Association (ABFA) has recently released statistics relating to the factoring and invoice discounting market for the first quarter of 2011 which show some growth in the overall marketplace but it’s the accompanying press release that I find most interesting.

Firstly there is the claim that “Invoice finance clients are again choosing not to drawdown all the lending available to them, showing that clients have sufficient funds for their business needs. The total funding available was £21.1bn yet only £14.8bn was utilised by clients, meaning there were £6.3bn of funds still available.”

I am picturing hundreds of factoring clients ringing up their client manager saying “No thanks I don’t need any money this week” I don’t suppose that the truth has anything to do with the many restrictions that the factoring companies impose to make sure that their clients never get anywhere near the notional funding limits.

The second claim that caught my eye was that “The average turnover of clients using invoice finance has increased from this time last year, even though total client numbers have dropped slightly following the recession. The average annual turnover per client a year ago was £4.36m, whereas this has grown to £5.27m in Q1 2011, a 21% growth in just a year.” A further statistic that wasn’t mentioned but has a huge bearing is that the number of clients with sales in excess of £100m per annum has grown from 205 in the quarter ended 31st March 2010 to 220 in the same quarter this year and that extra 15 clients who’s combined turnover will presumably total at least £1.5 billion will be enough to render the rest of the statistics completely meaningless.

Alastair Campbell would be justifiably proud of that press release 🙂