Growth In SME Invoice Finance

/ 7th September 2015 /

€544 million in Invoice Finance was advanced to Irish companies with a turnover of up to €5m at the close of the second quarter of 2015, according to new figures from the Asset Based Finance Association (ABFA), the body representing the industry in the UK and Ireland.

This accounted for nearly 44% of all funding advanced via Invoice Finance at the close of Q2 2015, a 3.5% increase on the same figure for Q1.

The latest figures show that funds advanced to Irish companies with a turnover of up to €5m has increased by 13% over the past six months, rising from €480m at the end of Q4 2014 to €500m at the end of Q1 2015 and now registering €544m at the close of Q2 2015.

Companies with an annual turnover of up to €5m now account for 77% of all Irish companies using Invoice Finance. Funds advanced to companies registering a turnover of between €1m and €5m showed the sharpest rise, increasing from €276m to €313m to demonstrate a growth of 13.5%.

As well as indicating that more mid-tier companies are now using Invoice Finance, the figures also indicate that these companies are now looking to unlock more funding to support their growth.

The figures show that sales turnover generated by all Irish companies using Invoice Finance for the year ending June 2015 reached €12.7bn, up 7% on the same figure for 2014. ABPA said this growth in the Irish marketplace demonstrates just how much Invoice Finance has supported Irish firms with working capital to fund their business during the recent economic recovery.

An average of €1.2bn in Invoice Finance is in use by Irish companies at any one time while the total funds agreed reached €3.1bn, up 2% on the same figure for 2014.

Lending Alternative

Deirdre Moore, Chairperson of ABFA Ireland and Head of AIB Commercial Finance, said: “These figures show that Invoice Finance is now a firmly established alternative to traditional lending products for businesses in Ireland looking to fund their growth.

“While we are seeing more and more businesses of all sizes and types taking advantage of Invoice Finance to fuel their growth, companies with a turnover of up to €5m account for nearly half of all funding advanced.”

Moore added: “One of the biggest strengths of Invoice Finance is the ability to increase the size of your facility as your business grows. For a business looking to capitalise on a growth opportunity, being able to rapidly raise and deploy funds can give you a vital edge over your competitor. As the economic recovery hits its stride, having funding that automatically expands with your business is a significant bonus.”