Asset-based finance is fast becoming a favourite of SMEs in search of credit, a Bank of England report has found, as businesses increasingly turn their backs on inflexible bank overdrafts.
Alternatives for financing working capital that are available in place of overdrafts, such as factoring and invoice discounting services, are being seen as particularly useful to small firms, who fear banks will cut overdrafts or increase rates.
"Small firms generally perceived credit conditions to be very tight. And many small firms were reluctant to approach banks in case it led to an increase in the cost of existing borrowings, or reductions in overdraft limits", the report said.
"There had been an increase in the use of asset-based finance for investment (in June 2011)," it concluded.
If you're an SME and would like more information on how we can help fund your business so you also don’t have to suffer the inflexibility and uncertainty of a bank overdraft, please call us now on 01756 694933 or alternatively use our online form to receive a quote.
The amount of cash funded through Invoice Finance solutions such as Invoice Factoring and Invoice Discounting rose by over 30% between 2006 and 2016....