Companies Deploy €1.5bn Invoice Finance

14 May 2020 | 07.13 am

Companies Deploy €1.5bn Invoice Finance

IAIFA sees growth of 10% in five years

14 May 2020 | 07.13 am

Cash flow to Irish companies that use invoice finance has grown by 10% in five years, to a total of €28.6 billion in 2019, according to the Irish Asset and Invoice Finance Association.

Circa 1,600 Irish companies use either or both of the two available methods of invoice financing, factoring or invoice discounting. According to the IAIFA, an average of €1.46 billion in invoice finance was in use by Irish companies at any one time during 2019. 

“With the funds available to Irish companies standing at €2.7 billion, this shows that there is significant capacity available from IAIFA members to provide more finance to more Irish businesses in the coming months,” said chairman David Avery.

“The 2019 figures highlight an increased level of sales from SMEs, across multiple sectors, that benefited from innovative invoice and asset-based lending solutions, and helped to underpin the strong performance of the Irish economy in 2019.”

The average number of debtor days outstanding during the final quarter of 2019 stood at 56 days. While this is higher than the same figure for Q4 2018 (54 days), the IAIFA statistics show that it is down substantially since 2017.

The association also represents financiers providing other asset-based financing, where a lender provides a broader mix of funding including revolving and amortising structures against a range of business assets. Traditionally, advances are available against invoices, but also against inventory, property, plant and machinery, and can also be arranged against intangible assets such as brands and forward income streams.

The members of the IAIFA are Bibby Financial Services (Ireland), Capitalflow, Close Brothers Commercial Finance, Grenke Finance Plc, AIB Commercial Finance, Bank of Ireland Commercial Financeand Ulster Bank Invoice Finance.

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