
By the end of 2014, ?19.4m was raised in annual asset-based finance ? a record high. The Asset Based Finance Association (ABFA) suggested asset-based finance provided to UK businesses is set to top ?20bn in 2015.
Around 80 per cent of this funding is forecast to be raised through invoice finance ? where businesses borrow against the value of their unpaid invoices. ABFA CEO Jeff Longhurst said that asset-based finance is now ?in pole position to become a leading alternative to traditional loans?. ?Invoice finance is already widely recognised by firms as a quick and straightforward way to leverage the underlying strength of their business, unlocking funding to grow,? he added. But research by MarketInvoice has found that 26,000 businesses face up to 35 different hidden fees?within invoice finance contracts with banks.?UK businesses are being charged ?758m per year for invoice finance,??425m more than the cost of using peer-to-peer providers. Anil Stocker, CEO of MarketInvoice, said: ?As a result, the market is plagued by bad practice.? The extra charges range from fees for handling paperwork to extra costs for making same-day payments. Read more about invoice finance:- Spot factoring: Another alternative to bank lending
- Considering seed funding? Have a look at your invoices instead
- Invoice finance: Dispelling the myths
Some 66 per cent of consumers said they realised they are “being overcharged”, according to PwC.?Furthermore, two-thirds of business leaders don?t trust their bank not to overcharge them.
By Shan? SchutteShare this story