Demand for invoice finance is predicted to rise by 21% during 2018, according to Hitachi Capital Invoice Finance.
The rise would take the company’s total credit lent to businesses during the year to more than £1 billion, compared to £893 million during 2017.
The predictions, based on funding line data, come as its research shows almost half of all small to medium UK enterprises turned down a contract or order last year because they couldn’t deliver due to a lack of available finance.
Hitachi Capital Invoice Finance research shows that invoice finance demand tends to grow throughout spring and summer, with SME’s most likely to seek funding between May and August.
The company has published a 2018 Cashflow Calendar that identifies key dates and financial events throughout the year that could influence a business’s cash flow and guide business owners to help better manage available funds.
Andy Dodd, managing director of Hitachi Capital Invoice Finance, said: “A sound business will match its method of borrowing to the asset being financed and on which the debt is secured. This means cash flow finance represents some of the lowest interest rates and most flexible methods of finance, which rises and falls with fluctuations in turnover.
“Therefore, if the business has sound profit margins, the cost of interest will behave like a variable cost, moving in line with turnover.
“Crucially, a good cash flow finance provider will ensure that the collection of debtor invoices is efficiently and professionally carried out to minimise the amount that needs to be borrowed, mitigating future interest rate rises.”