SIA Group supports ABL inventory lending growth

Whilst lending against assets has seen an increase in Q3 2018 against the corresponding period of the previous year, the real revelation in UK Finance’s invoice and asset based lending (ABL) statistics has been the increase in inventory (stock) lending in the ABL mix from £733m to £867m, highlighting the growing importance of the asset in terms of its relative contribution.

Stephen Pegge, Managing Director, Commercial at UK Finance, commented: “Asset based lending continues to show steady growth, driven mainly by advances to larger businesses. Support to small and medium-sized companies through invoice finance and asset-based lending is now comparable to total balances drawn on overdrafts. However, overall growth has remained modest in line with recent trends across SME lending, as businesses delay investment decisions until the broader economic picture becomes more certain.”

Paul Craig, Managing Director of SIA Group said: “It’s exciting to see the continual rise of ABL in funding the ambitions of UK mid-market businesses. That ABL has been growing at a time of unprecedented uncertainty and volatility is a credit to the industry; the fact that ABL has reached parity with the overdraft is a recognition of the flexibility of the product, the impact of regulation and the resilience of the sector.

“With a near on 20% year on year increase Inventory is playing an key role in the ABL mix, putting a greater emphasis on pre lend inventory collateral due diligence and accuracy of reporting and therefore the choice of valuation/ collateral due diligence partner is paramount. We are always mindful of the fact that accurate valuations and independent advice form the foundations for the most critical decisions that ABL’s make and that our role is pivotal. SIA Group is committed to adding value to every assignment with pragmatism and certainty of delivery to support the ABL industry in driving even greater success in the years to come”