Concern as SMEs turn away from alternative finance

When the economic crisis was at its lowest point, there was great emphasis on the need for alternatives to traditional banking supports. Factoring, also known as invoice finance, was seen as one of the principle alternative financial intermediaries, offering a funding source for cash-strapped businesses by agreeing to pay the company up front the value of their sales invoice less a discount for commission and fees.

Recent statistics released by the Asset Based Finance Association(ABFA), which covers the UK and Ireland, reports “the total amount of lending UK businesses secured through invoice finance has passed the £20bn barrier for the first time, hitting a record £20.3bn this year, up 5% from £19.3bn last year”.

However, the ABFA stats also show that there has been no such growth in use of Factoring on the Irish market.