The second quarter of 2018 saw a rise in UK businesses borrowing against non debtor book assets but there was a drop in lending against invoices.
According to figures published by trade body UK Finance, lending against assets came in at £4.3bn over the quarter, representing a rise of 5.6% when compared to the same period a year earlier. There was a particularly strong rise in borrowing against stock, which was up 18% compared to Q2 2017.
Meanwhile, companies borrowed £17bn against invoices, down from £17.76bn a year earlier.
The fall in invoice lending meant that the Asset Based Lending industry saw an overall decline in total borrowing of 1.9% year-on-year to £21.4bn.
But the there was also positive news for the industry. Despite a decline in lending, the ABL sector succeeded in attracting a larger number of clients over the three months to the end of June. with the number of clients rising 1.1% to 40,333. And there was a particularly strong increase (7.0%) in clients with a turnover of more than £10m.
Commenting on the figures, UK Finance Managing Director welcomed a rise in the number of small and larger companies choosing to borrow against assets and receivables. “It is encouraging to see steady growth in client numbers for the second consecutive quarter, with over 40,000 businesses receiving funds through invoice finance and asset-based lending. This is being driven partly by an increase in the number of larger businesses opting for this form of finance. We are also seeing the number of smaller clients and the funding provided to them remain steady,” he said.