Release Date : 8 June 2018 IFABL Update - Quarter 1, 2018 Businesses' asset based funding rises four per cent in Q1 2018 Key data highlights:. Growth in overall s to clients was up four per cent year-on-year. There was particularly significant growth in wider asset based lending facilities (11 per cent year-on-year), driven by funding d against stock. Client numbers were marginally up (one per cent) but total client turnover within Q1 was down year-on-year Commenting on the data, Stephen Pegge, Managing Director, Commercial at UK Finance said: "Invoice finance and asset based lending by UK Finance members showed solid growth in the first quarter and stood at almost 22 billion, up four per cent on 2017. "Members are reporting particularly strong growth in asset based lending facilities, showing that as well as funding against invoices, client businesses are increasingly accessing wider finance facilities secured against stock. "Conversely, total client sales are down compared to the same period in 2017, reflecting subdued economic growth in the first quarter." Notes to Editor 1 For more information please call the UK Finance press office on 020 7416 6750 or mail press@ukfinance.org.uk. 2 3 UK Finance is a trade association formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Invoice finance and asset based lending are forms of finance provided to client businesses against the assets of the client. For many businesses, particularly small and medium-sized businesses, the debtor book will be one of the most significant assets they have. Invoice finance (factoring and invoice discounting) allows businesses to release the working capital tied up in the debtor book. In addition to providing finance against debt, an asset based lending facility can be used to provide a broader mix of funding, including revolving and amortising structures against the entire range of business assets. These can include inventory, real property, plant and machinery, and also against intangible assets such as brands and forward income streams. Invoice finance and asset based lending are now used by client businesses of all sizes and across most sectors of the economy. The industry in the UK is diverse; these forms of finance are provided by the large UK banks, international, specialist and challenger banks, as well as by a range of non-bank specialist finance providers. At any one time, the sector will be providing over 20 billion of funding to clients, and in 2017 UK Finance s IFABL members supported clients with a total turnover of around 290 billion. Next update: 31 August 2018
number millions Release Date : 8 June 2018 Advances at quarter end 25,000 20,000 16% 14% 12% Advances 21,660 mn 4.0% 15,000 10,000 10% 8% 6% 5,000 4% 2% 0 0% Number of clients at quarter end Total quarterly client sales 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 0 40,012 40,024 40,253 40,099 40,320 71,230 70,562 72,500 73,674 69,153 Number of Clients 40,320 0.8% Client Sales 69.2 bn -2.9% Client sales by product 50% 40% 30% 20% 10% 0% -10% Non-recourse (included within all products) Export invoice discounting Export & Import factoring 9,346 mn -10.1% 5,791 mn -12.8% 483 mn 8.1% Domestic Factoring 4,713 mn 0.1% -20% Domestic invoice discounting 58,166 mn -2.1% Distribution of s by product Asset based lending Asset based lending 4,246 mn 10.7% Invoice Finance Invoice Finance 17,414 mn 2.4%
Distribution of client numbers by industry sector 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other 3,383 8.8% Construction 2,640 13.5% Retail 939 20.2% Transport 2,739 9.0% Services 10,998-5.2% Distribution 9,242 0.7% Manufacturing 10,379-1.2% Next update: 31 August 2018
Release Date : 8 June 2018 Client sales (all products) (within the quarter) Domestic factoring mns 4,709 4,784 5,016 5,052 4,713 Domestic invoice discounting mns 59,435 58,117 60,765 62,348 58,166 Export & import factoring mns 447 443 477 462 483 Export invoice discounting mns 6,639 7,218 6,242 5,812 5,791 Total mns 71,230 70,562 72,500 73,674 69,153 Non-recourse included in total above mns 10,398 10,425 9,611 10,278 9,346 Credit protection payments to clients mns 9.5 8.8 8.5 9.5 9.4 Number of clients at period end (all products) Domestic factoring Number 15,801 15,461 15,492 15,207 15,208 Domestic invoice discounting Number 14,377 14,698 14,749 14,671 14,647 Export and import factoring Number 8,551 8,503 8,581 8,696 8,880 ABL and stock finance Number 1,283 1,362 1,431 1,525 1,585 Total number of clients Number 40,012 40,024 40,253 40,099 40,320 Clients lost in quarter Number 2,057 1,909 1,657 1,896 1,709 Clients gained in quarter Number 1,944 1,921 1,886 1,742 1,930 Client sales growth by product Domestic factoring 5% -3% 0% 1% 0% Domestic invoice discounting 5% -3% 2% 0% -2% Export & import factoring 4% 4% 6% -7% 8% Export invoice discounting 44% 41% 17% -8% -13% Total s (end quarter balances, all products) Annual growth Non-recourse included in total above 14% 8% -3% -7% -10% mns 20,836 21,857 22,066 22,162 21,660 14% 13% 13% 5% 4% Invoice finance - s against debt mns 16,999 17,782 17,908 18,103 17,414
Total s contd Total asset-based lending mns 3,837 4,075 4,158 4,059 4,246 Against debt mns 2,679 2,842 2,938 2,765 2,768 Against stock mns 660 730 733 759 893 Against plant and machinery mns 408 400 391 450 499 Against property mns 90 103 96 85 86 Total funding available mns 29,610 30,482 30,696 30,512 29,951 Total facilities agreed Security values mns 41,063 41,682 42,311 41,400 41,652 Debtor outstandings mns 35,111 35,700 36,248 36,834 35,924 Stock mns 3,355 3,402 3,433 2,786 2,887 Plant & machinery mns 812 896 895 840 858 Property mns 200 215 206 198 216 Total security values mns 39,478 40,213 40,782 40,658 39,885 Analysis of s and client numbers by client size Client annual turnover bands ( mns) Number 12,840 12,468 12,608 12,478 12,337 0.0-0.5 mn mns 733 678 703 761 868 57,087 54,379 55,758 60,987 70,357 Number 5,864 5,936 5,849 5,801 5,799 0.5-1.0 mn mns 491 505 517 498 458 83,731 85,074 88,391 85,847 78,979 Number 12,912 13,116 13,142 13,079 13,314 1.0-5.0 mn mns 2,699 2,797 2,885 2,750 2,652 209,030 213,251 219,525 210,261 199,189 Number 3,660 3,706 3,804 3,811 3,844 5.0-10.0 mn mns 1,930 1,940 2,174 2,093 1,967 527,322 523,475 571,504 549,200 511,707 Number 2,969 3,003 3,023 3,051 3,119 10.0-25.0 mn mns 3,152 3,368 3,508 3,485 3,476 1,061,637 1,121,545 1,160,437 1,142,248 1,114,460
Client annual turnover bands ( mns) contd. Number 916 915 946 960 997 25.0-50.0 mn mns 2,348 2,300 2,477 2,442 2,635 2,563,319 2,513,661 2,618,393 2,543,750 2,642,929 Number 489 486 494 514 492 50.0-100.0 mn mns 2,381 2,438 2,674 2,880 2,540 4,869,121 5,016,461 5,412,955 5,603,113 5,162,602 Number 362 394 387 405 418 over 100.0 mn mns 7,102 7,831 7,128 7,253 7,064 19,618,785 19,875,635 18,418,605 17,908,642 16,899,522 Number 40,012 40,024 40,253 40,099 40,320 Total mns 20,836 21,857 22,066 22,162 21,660 520,744 546,097 548,183 552,682 537,202 Analysis of sole lender and syndicate deals Clients' sales volume Sole lender deals mns 62,022 Lead mns 7,131 Non-lead mns N/A Total mns 69,153 Advances at the period end Sole lender deals mns 18,869 Lead mns 1,355 Non-lead mns 1,436 Total mns 21,660 Number of clients at period end Sole lender deals Number 40,122 Lead Number 198 Non-lead Number N/A Total Number 40,320 Analysis of client numbers by Industry sector Services Number 11,602 10,730 10,954 10,892 10,998 Manufacturing Number 10,507 10,533 10,552 10,426 10,379 Distribution Number 9,176 9,460 9,349 9,222 9,242
Analysis of client numbers by Industry sector contd. Transport Number 2,512 2,568 2,597 2,651 2,739 Construction Number 2,326 2,392 2,455 2,536 2,640 Retail Number 781 896 948 934 939 Other Number 3,108 3,445 3,398 3,438 3,383 Total Number 40,012 40,024 40,253 40,099 40,320 More detailed data tables For information or media enquiries, please contact press@ukfinance.org.uk Next update: 31 August 2018