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• 18 Jun

  Which Industry Sectors And Trades Use Invoice Finance

  Understanding which industry sectors and trades tend to use invoice funding might be useful if you are considering taking up a facility. After all, this type of funding is not necessarily suitable for every type of business, so it is worth knowing if others in your sector already use these services.

  Which Trades And Sectors Use Invoice Funding?

  The broad range of different trades that use receivables financing, suggests that there is a facility of some description tailored to almost every industry sector, with a particular focus on some niches that are highly suited.

  UK Finance is the industry body that represents the receivables financing sector. Part of their organisation was formerly known as the ABFA. The industry body publishes quarterly statistics which include a breakdown of the high-level sectors that their members are funding. Whilst the UK Finance membership may only account for approximately 60% of invoice funding companies in the UK (according to our estimates), their figures are a good indication of the types of businesses that are using these services.

  Breakdown Of The Sectors

  The UK finance member's client numbers breakdown, by sector, for the quarter ending December 2018 was as follows:

  • Services 27.4%
  • Manufacturing 25.5%
  • Distribution 23%
  • Transport 6.6%
  • Construction 6%
  • Retail 2.5%
  • Other 9.1%.

  So it can be seen from those high-level sectors, that almost all trades are catered for to some degree. This includes sectors such as construction and retail, which are not handled by all funders across the industry.

  High Growth & Recruitment Companies

  In our own research, we have found a correlation between high-growth businesses and increased use of invoice funding services. There are also key sectors, such as the recruitment sector, which has a very high take up of these types of services. Again, our own estimate of the penetration into the recruitment sector is that it could be as high as 17%, significantly above the overall average.

  List Of Industry SIC Codes

  We have put together an extensive list of industry SIC codes (Standard Industry Classification codes), against which we have assigned letters, indicating which receivables financing products are likely to be appropriate. This includes traditional invoice funding, construction finance which is specific to construction sector businesses, and retail finance. Retail finance tends to be finance based on projected card payments, which are then repaid via the card sales taken by the retailer.

  In addition to these approaches to funding different sectors, there are of course other options, such as traditional business loans, which are broadly available and could be used in any sector.

  Can We Help You?

  Call Sean on 03330 113622, if you would like more help and guidance regarding any of these services, and how they can help your sector.

  By Glenn Blackman