Interesting factoring statistics from the ABFA

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 🙂

1 thought on “Interesting factoring statistics from the ABFA”

  1. Interesting analysis. Certainly the clients I am speaking with are cash strapped and frustrated with existing lenders not generating the cash they had promised.

    The market feels very tight with an increase in the numbers of brokers and lenders increasing their own marketing activity.

    There also seems to be a lot of caution which manifests itself in indecision.

    As such I would agree the ABFA interpretation is slightly rose tinted.

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