Figures just released from the Asset Based Finance Association (ABFA) show invoice finance is out performing all other types of business lending. Total advances from members have grown 9% year on year, whereas bank lending actually contracted by 2.5% in the same period.

The latest quarterly industry report from the ABFA shows turnover growth of 15% year on year, with total client sales in the quarter of £55.8bn.

However not all of the funds that are available from the sector are being utilised, and many invoice finance clients are not drawing down the full level of cash available to them, which would indicate that they have sufficient funds for their business needs. The total funding available was £21.1bn yet only £14.8bn was utilised by clients, meaning there were £6.3bn of funds still available. There may be other underlying facts that are not picked up by this report in that many clients who could benefit from factoring or invoice discounting are not aware of it as an option, or that it may not have been proposed to them by their bank or adviser.

The good news for businesses in general is that the average turnover of clients using invoice finance, which will include invoice factoring & invoice discounting has increased from this time last year, even though total client numbers have dropped slightly following the recession. The average annual turnover per has grown by 21%.

Paul Barnsley, chief operating officer for The Interface Financial Group (IFG) said: "These figures are great news for our sector, and they show how successful the invoice finance industry is; it is also testimony to the sector that businesses who use factoring or invoice discounting are reporting positive growth in sales. There is no shortage of funds in our sector, but there is a shortage of knowledge in general about how it operates, the types of businesses that can benefit from it, and how to use invoice finance effectively in business."

"We, like many in our industry are seeing a rise in enquiries from prospective clients and the more we can get the message out to businesses about the services we offer the better. It makes sense for any SME business owner to be aware of all of the options available to them to grow their business."