The Untapped Pool of Invoice Financing Prospects

  • Anil Kanda
  • 30 Nov, 2010

Glenn Blackman of Cashflow Acceleration Limited comments on the availability of invoice financing prospects.

“As part of our ongoing investigation into the relatively small number of invoice finance users in the UK and recent reductions in client numbers, we wanted to find out which invoice finance companies were most actively contacting prospective customers, regarding invoice finance.

“To do this we selected a sample of 100 SME businesses which were all of an appropriate size and within industry sectors that would be suitable for invoice finance. They were contacted and asked which invoice finance companies had contacted them during the last 12 months, in order to promote their services.

“82% of the businesses questioned said that they had not heard from any invoice finance companies over the last year. It seems little surprise that client numbers have contracted when such a large number of target customers appear untapped.

“That leaves the 18% of businesses that had been approached by an invoice finance company. We asked them to name the company that had contacted them and the results were as follows:

  • 11% Bank owned invoice financiers
  • 4% An independent invoice finance company (only 1 was mentioned)
  • 3% An invoice finance brokerage (only 1 was mentioned)

“Of the respondents that said they were contacted by a bank, four different banks were mentioned. However, only one respondent said that it was not their own bank that had contacted them.

“The implications are that the banks with invoice financing arms appear to be the most active in terms of contacting prospective invoice finance customers and they also appear focused on their existing banking customers.

“Only one of the independent invoice finance companies appeared in the results, accounting for 4% of the responses.

“The opportunities appear the greatest amongst the 82% of respondents that said they had not been contacted by any invoice finance companies in the last year. This untapped pool of invoice finance prospects is also likely to be subject to lower levels of competition from other providers.”

Glenn Blackman MBA MCIM writes regarding invoice finance and related matters at: www.glennblackman.co.uk. Glenn is also the Managing Director of Cashflow Acceleration Limited, a specialist invoice finance brokerage.