Has the industry increased or declined in recent years?
Here at Simply Factoring Brokers we have been watching the market for nearly a decade now and in that time the market has certainly changed. The business has been going for a strong 8 years with the factoring side started around 6 years ago and in those last few years the market has soared.
Since we first started in the Invoice Finance industry in 2008 the total amount of clients that have an Asset Based Finance facility e.g. Factoring, Invoice Discounting etc has gone from 48,903 to 67,676. So in just 6 years the industry itself has grown by just over 38%, however the amount of new clients that get taken on, on an annual basis are between 5,000 – 7,000 so the new sales in the industry are stagnating at around the same figure. Clearly the industry is growing because when a business takes on an Asset Based Finance facility they then see this facility as an integral part of their business.
The rate of growth in this industry over the last 14/15 years is astounding, since the millennium (2000) the industry has grown by 368% and in that timeframe the industry has now become allot more competitive with 38% more invoice finance companies on offer today than there was then, this figure doesn’t include the soar in brokers which I would guess is around the same figure.
The three main industries that have seen the biggest increase in using this type of facility are as follows;
- Construction
- Distribution
- Services
Also the biggest turnover bracket that has seen the biggest increase in using Asset Based Finance are companies that have a turnover between £1 – £5 million. The furthest our stats go back is 1995 and in that year there were 7,384 clients with factoring and 3,096 with invoice discounting, so as you can see in 2 decades the amount it has grown is expediential
As you can tell the Invoice Finance industry is most defiantly on the up, with no look of slowing down and from what we hear at Simply Factoring Brokers it’s still on the up and mostly in recent years it has grown in a larger margin than previously. Apparently around 15% of all business are applicable for an Invoice Finance facility and with 4.9 million business in the UK this means that there are 735,000 business that can use a facility like this and with the current numbers at just short of 70K, this means there is still 92% of the market to go for. So as you can see the above figures are nominal and in our opinion over the next 5 years this industry will easily double in size minimum
We hope you have found this blog useful and made for some interesting reading. If there is anything you think we can help with please don’t hesitate to get in touch.
Information Sources;
- abfa.org,uk (Asset Based Finance Association)
- fsb.org,uk (federation Of Small Business)