Why is the British business using financial invoices so little?


The latest figure of the asset -based financial association report that in September 2009, only 42,983 British businesses used the invoice finances provided through their membership. This represents only 0.73% of the total number of British businesses currently registered in Dun & Bradstreet’s Marketplace of UK Business Database.

To try and find out the reasons for taking this low invoice financing, we assign research involving telephone interviews with 100 SMEs (small & medium businesses) to better understand their attitudes towards invoices finance.

We ask the business -business:

“Do you think why so a few businesses in the UK use financial invoices?”

Research result

The results are as follows:

41% said due to costs.

31% said that it was not enough to be promoted and business had never heard of it.

18% says it is easier to use a cup or loan.

10% say it is because of the bad reputation they associate using products.

That is an interesting answer because they show how bad it is to promote these products, and how broad the misunderstanding of these products.

Analysis of these results

Taking every response in sequence, there are some important points that seem to be misunderstood by the business.

41% – Cost

We recently built and issued a factoring savings calculator that shows how businesses can use factoring receivables (financial forms of invoices) and achieve savings that will be more than compensating for costs incurred and can create a reduction in net costs for business. This savings are possible through the use of outsourcing credit control functions that come with factoring and by finding a supplier discount for cash payments made possible by cash issued from factoring receivables.

31% is not enough to be promoted / have never heard of it

The lack of promotion of flexible working capital products, by the financial industry, is clearly something that contributes to the collection of this product and the lack of understanding of how this facility works.

18% is easier to use a cup or loan

There are several points to consider here.

First, the number of jobs needed by the client to run several invoice financial facilities is completely minimal. There are products on the market that have eradicated the need for reconciliation and technological development means that invoices can often be uploaded electronically, and automatically, directly from the client’s ledger book package. Clients can even choose to get cash transferred to their accounts because they are available so they don’t even have to ask for it.

Even if we assume that the overdrawal is easier to use, there are a number of advantages from the financial invoice than the cup and loan:

* Overdraft and loans do not grow in line with the growth of business changes while invoices are not.

* The level of funding issued by financial invoices tends to exceed what can be increased through an overdue and loan.

* Overdraft and loans often require net worth in business and profitable trade history while financial invoices can be available for losses to make businesses and even think they have negative net worth.

Bad reputation 10%

A small number of respondents feel that using financial invoices can be bad for their reputation if other businesses know. I argue that it can also be good for their reputation, because their cash flow will increase, but take their concerns that there are facilities that are fully available. Client customers will not realize that they use it and this overcomes whatever concerns they might have.


So in summary, there seems to be a little promotion of financial invoices in the UK and therefore a little knowledge about the financial invoice is proven among the British business. This is together with many misunderstandings about the facilities available under the financial banner of the invoice possible

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