Asset-based finance reaches record high in UK

Tom Wright
clock • 1 min read

UK companies look for alternative to traditional funding methods as Brexit uncertainty continues

Asset-based lending hit a record UK high of £22.2bn in 2016 as businesses look to alternative methods of funding for acquisitions, according to the Asset Based Finance Association (ABFA).

ABFA claims the 13 per cent jump on 2015 lending is a result of UK businesses turning to asset-based finance, instead of more traditional sources such as bank overdrafts and loans, to finance growth and M&A activity.

ABFA said another factor in the increase was companies looking for financial security as a result of the Brexit vote.

Businesses with over £100m revenue increased their asset-based borrowing by 21 per cent year on year in 2016, it added, from £6.7bn to £8.1bn.

Jeff Longhurst, chief executive at the ABFA, said: "Larger businesses are increasingly using asset-based finance in innovative ways to fund their growth and M&A activity.

"Asset-based finance is already well used among SMEs, but now larger businesses are well aware of the opportunities it provides them. Bring able to release the value in a target company's invoices can often be the critical factor in an acquisition.

"All sizes of UK businesses need to be aware of the possibilities and opportunities that asset-based finance can provide them beyond what traditional sources can often offer them."

ABFA said that invoice finance made up 80 per cent of asset-backed finance in 2016 - when companies raise funds against unpaid invoices - equating to £17.9bn.

The other 20 per cent was asset-based lending, where companies can raise money secured against assets such as property, inventory and machinery.

Sign up to our newsletter

The best news, stories, features and photos from the day in one perfectly formed email.

More on Credit and Finance

VAR Fusion Consulting takes on the Big Four: 'We want to offer enterprise-type services to the SME market where MSPs have not been well serviced before'

VAR Fusion Consulting takes on the Big Four: 'We want to offer enterprise-type services to the SME market where MSPs have not been well serviced before'

CRN spoke to director Adam Maurice today to ask him how he plans to change the professional services market and 'disrupt' the hegemony of PwC, Deloitte, EY and KPMG

Kelsey Rees
clock 24 October 2022 • 2 min read

North CEO Williams on private equity influx into channel

Glen Williams gives his verdict on what the influx of PE into the channel means for the industry

Doug Woodburn
clock 22 April 2021 • 5 min read

What do MSPs and resellers really think about private equity?

Is private equity good or bad for the industry? Leading industry figures including Stuart Fenton, Marc Chang and Roger Whittle gave their views for our Private Equity Report

Doug Woodburn
clock 16 April 2021 • 4 min read

Highlights

Staff & Salaries 2022

Staff & Salaries 2022

A snapshot of pay and headcount trends in the UK channel

Doug Woodburn
clock 09 March 2022 • 1 min read
Midwich CEO on Nimans acquisition, 2021 results and return to pre-pandemic levels

Midwich CEO on Nimans acquisition, 2021 results and return to pre-pandemic levels

Stephen Fenby talks to CRN after Midwich’s 2021 results in which profitability exceeded pre-pandemic levels

Josh Budd
clock 08 March 2022 • 3 min read
4 more vendors suspend sales in Russia following Ukraine invasion

4 more vendors suspend sales in Russia following Ukraine invasion

IBM and Microsoft are among a number of vendors which have also announced that they will halt sales in Russia following the invasion of Ukraine.

clock 08 March 2022 • 3 min read