AT first glance the letters ABFA look like they might represent the Arabian Football Association – or perhaps even the Abba Fan Club! As you may well know, it actually stands for Asset Based Finance Association and the organisation is there to help companies find alternative ways of bringing in cash. Or Money, Money, Money as the 1970s Swedish megastars would say.
The question is, can it help you? Well, if you are struggling to meet monthly commitments because of a deterioration in cash flow, and you are finding it difficult to grow your business, then the answer is yes. As long as you are prepared to sell your invoices at a discount that is. As the level of borrowing from banks fell last year, the level of invoice funding rose significantly. Firms, large and small, who have used this method of accessing money to ease cash flow, have seen their sales increase by a whopping 13% a year. The turnover figure for businesses using this method is set to reach close to £250billion in 2012.
Even the large companies, with sales exceeding £50million, are getting in on the act. As Abba would say, it’s now The Name Of The Game. Manufacturing and construction are two of the industries which depend on invoice finance. If your business could benefit, and you haven’t checked it out already, then perhaps it’s time to do just that. After all, it’s best not to wait until your company has issued an SOS.