Invoice finance market opportunity for commercial brokers
Commercial brokers should be recommending invoice finance to their corporate clients as a viable cash flow strategy in the long term says Kate Sharp, head of trade body Asset Based Funders Association.
At the first annual conference of the National Association of Commercial Finance Brokers held yesterday in Birmingham, Sharp told the commercial finance world that the "myths" surrounding invoice finance were hindering the growth of a potentially enormous market, which could earn brokers thousands in extra revenue.
Invoice finance offers businesses the opportunity to fund cash flow actively, meaning companies which sell goods on credit terms to good customers can access the value in their outstanding invoices earlier than the usual credit period of between 30 and 60 days.
Sharp said the industry has suffered as a result of stigmas attached to invoice finance with no foundation.
She said: "The market in 2009 saw a £191 billion turnover and 43,590 clients serviced. That's good, but it's nowhere near good enough. Brokers are missing out on commissions they can earn when they refer their clients to a factor."
The "myths" Sharp said afflicted the industry included the notion that invoice finance was expensive, short term, only for small firms and too complicated.
But during her presentation to the NACFB conference attendees she said the industry had seen average annual growth of between 12% and 13% and "you do not get growth in an industry such as this, if what you're selling isn't worth having".
She called invoice finance and factoring a flexible source of cash flow funding that can help firms of all sizes become more profitable and should be considered as a "lifestyle choice".
She added: "I admit it's more complicated than an overdraft, but if I can learn it, then I'm damn sure most people out there can learn it too."
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