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UK Invoice Finance Market Research

Updated on September 15, 2015

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98% Said They Would Recommend Invoice Finance

In our Invoice Finance Recommendation and Advertising study, conducted in May 2015, we interviewed 100 respondents that already used either factoring or invoice discounting.

We asked these existing users if they would recommend these products to other businesses and 98% of them said that they would.

We went on to ask them if they had checked their product pricing against the market in the course of the last year. Only 22% had with 78% of them not having checked the pricing of their product in at least a year.

Invoice Finance Mystery Shopper Results

In August 2014 we completed a mystery shopper exercise among our panel of invoice finance providers. There were asked to provide quotations for confidential invoice discounting, recourse and non recourse factoring, based on typical client scenarios that we explained to them. Full details of this research are explained in our mystery shopper research report.

This report sets out the top 3 cheapest quotes provided by invoice finance companies in respect of each of the product categories.

Invoice Finance Client Satisfaction Survey

This study looked at 100 randomly selected existing invoice finance clients and asked them about the time during which they had used either factoring or invoice discounting, and how they rated their provider.

It found that on average the time for which they used these products was 5.28 years and in that time they had used an average of 2.14 different providers. They moved providers primarily to find a "cheaper deal", with 42.4% of respondents giving this reason to move providers.

When asked about their satisfaction levels with their invoice finance company, the rating given was 45% higher when the provider was "independent" as opposed to being owned by a "high street bank".

The range of average ratings assigned to different providers was significant with a 66% range in the average ratings assigned to different factoring companies and a 183% range in the average assigned to invoice discounting companies. This suggests significant differences between the service levels delivered by different providers, a key consideration for both existing product users and businesses that are considering using these products for the first time.

The infographic below summarises the key findings from the survey. Further down you will also find information from another survey we conducted where we asked existing users to rate their provider.

Invoice Finance Client Satisfaction Survey

Summary of the findings of our survey of existing invoice finance clients.
Summary of the findings of our survey of existing invoice finance clients. | Source

Which Invoice Finance Companies Are Most Highly Rated

In 2013 we conducted a survey of 2,000 users of invoice finance (factoring and invoice discounting). The survey asked them to review their existing invoice finance company and asked that they provide a rating of their overall satisfaction with their provider.

The 6 most highly rated invoice finance companies were as follows:

  • Metro Bank SME Finance
  • Hitachi Capital Invoice Finance
  • ABN AMRO Commercial Finance
  • GE Capital Commercial Finance
  • IGF Invoice Finance
  • Close Brothers Invoice Finance

Note: some of the above companies have changed their name in the interim period so the above list reflects their current name.

Suitability Of Invoice Finance For High Growth Businesses

We surveyed 100 fast growing businesses, with fast growth defined as a 20%+ turnover increase since the previous year. We found that 59% of these businesses said that they were short of funding for their business and on average they were 43% short of the amount of funding that they needed.

The shortage of funding led these high growth businesses to turn down business, owe money to creditors and to become loss making.

Whereas on average we estimated that less than 1% of the business population used invoice finance we found that amongst these fast growing businesses 12% used that method of funding. Furthermore, 52% of the segment of businesses that said that they could not grow any faster, even with more funding, used invoice finance.

Despite this high correlation between these finance products and fast growth, of the businesses without enough funding, 84% didn't even consider invoice finance. The key reasons were:

  • Not thinking it was an option
  • Not having heard of it
  • Not being offered it as a product option

The infographic below sumarises the results of this survey.

Fast Growth Business Funding Survey

Fast Growth Business Funding Survey Results Summary
Fast Growth Business Funding Survey Results Summary | Source

Suitability Of Invoice Finance For Small Start-up Businesses

We surveyed a group of 100 small new start-up businesses to understand their issues around funding their new ventures. All those surveyed had started a business within the last year.

31% of those surveyed said that they were short of funding. The most commonly used source of funding was bank overdraft but that product was being used by 74% of those that said they had funding restrictions.

The most common effects of those funding restrictions were described as:

  • Growth restrictions
  • Problems paying creditors
  • Problems paying employees

96% had not considered invoice finance with the key reasons being:

  • Not thinking it was an option
  • Not having heard of it
  • Thinking it would be expensive

Only 2% were using invoice finance but in those cases they said they had sufficient funding.

See the infographic below for a summary of the results of this survey.

Funding Of New Start-Ups

Funding of New Start-ups
Funding of New Start-ups | Source

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    • InvoiceFinanceMan profile image
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      Glenn Blackman 14 months ago from East Sussex

      Our recent research findings have included that 14 times more fast growing businesses (20%+ turnover growth each year) use receivables finance than the UK national average. We have also found that 87% of existing users said that these products enabled their business growth.