ABFA’s annual confidence survey of its members in the UK and Ireland forecasts a record high of £20.8bn will be lent to businesses by the end of 2015, up from £19.4bn in December 2014, itself an all-time high.

Invoice finance is expected to account for 80% of this funding, with the remainder  delivered through wider asset based lending packages, where businesses secure funding against a range of assets they already own, such as stock, machinery or property, as well as against debt.

The survey suggests an increasing number of businesses will use asset based finance in 2015.  Particular growth is expected in asset based lending, with client numbers predicted to increase by over 20%, while numbers of invoice finance users are expected to increase more modestly by around 8%.

Jeff Longhurst, CEO of ABFA said: ‘SMEs in particular are seeing the value of converting their unpaid invoices into ready capital for investment. Asset based lending is also rapidly growing in popularity with companies of all sizes, as they see the benefits of using the value of their inventory, equipment and other property as security –  that security allows them to access business finance they might not otherwise have got.’

ABFA members are confident about the general economic outlook; three in four respondents (73%) said they expect economic conditions to improve over the next 12 months, with one in four forecasting that the outlook will remain stable.