In addition to providing finance against debt, an asset-based lending facility can be used to provide a broader mix of funding, including revolving and amortising structures against the entire range of business assets.  These can include inventory, real property, plant and machinery, and also against intangible assets such as brands and forward income streams.

The industry body’s update for the second quarter of 2018 shows that total numbers of companies using asset-based lending reached 40,333, an increase of 1.1% compared to the same quarter the previous year. The number of businesses with a turnover of over £10m increased to over 5,000, up 7%.

Asset based lending amounted to £4.3bn, 5.6% higher than the same quarter the previous year. This was driven in particular by funding advanced against stock, which was 18% higher than the same quarter in 2017.

Stephen Pegge, managing director, commercial at UK Finance said: ‘It is encouraging to see steady growth in client numbers for the second consecutive quarter, with over 40,000 businesses receiving funds through invoice finance and asset-based lending.

‘This is being driven partly by an increase in the number of larger businesses opting for this form of finance. We are also seeing the number of smaller clients and the funding provided to them remain steady, and the industry has the capacity and expertise to provide even more financing to these businesses in future.’

Report by Pat Sweet