Articles
Setting The Trend For Asset Based Lending
Lloyds TSB Commercial Finance - which has a key regional office in Birmingham - is leading the field in the UK's growing asset based lending market, according to the latest statistics published by the Factors and Discounters Association.
The report, which lists performance figures for the fourth quarter of 2003, highlights LTSBCF's continued domination of the ABL market, of which it currently has more than 14,000 customers.
Among the impressive statistics recorded by LTSBCF are accelerated growth for invoice discounting turnover, an increase in factoring and discounting client numbers, and a significant rise in advances to clients with a turnover in excess of £10m.
The figures reflect the increasing role asset based finance is playing in the funding of mergers, acquisitions and management buy outs, such as the recent MBO at Black Country architectural ironmongery distributor Laidlaw Solutions Ltd.
During the period of the survey LTSBCF saw its clients' invoice discounting turnover rise to £13,778m. Its year on year growth of 19.8 per cent in this area outstripped the market average of 14.5 per cent.
The number of businesses taking advantage of asset based lending as a flexible form of finance is further illustrated by the rise in the number of LTSBCF factoring and discounting clients (2.5 per cent and 3.6 per cent respectively).
Also, the sums advanced by the company to its asset based lending clients were up by 9.8 per cent.
Jon Adams, regional director of Lloyds TSB Commercial Finance, said: "As the results of the survey show, as a business we are continuing to set the standards for asset based lending services.
"We are the market leader in the ABL sector and remain the only major UK clearing bank able to offer a full service for this form of finance, which puts us in a strong position for future growth and expansion."
The report's positive results follow the company's recent re-branding exercise, which means Lloyds TSB Commercial Finance now incorporates the Alex Lawrie Factors, Asset Finance and CashFriday brands.
The FDA survey - which represents companies that provide factoring, invoice discounting and other forms of asset based lending - also shows that the ABL sector as a whole is continuing to grow at a healthy rate.
Since 1993, FDA members' client turnover has grown significantly from £18.9billion to £117.1billion, an increase of almost £100billion.
Asset based lending involves advancing cash to a business against the value of its assets, including debtors in the form of factoring or invoice discounting, stock, property and/or existing plant and machinery. It also includes hire purchase and leasing products to fund assets in the form of new plant, equipment and vehicles.
With invoice discounting, the client company manages its own sales ledger and credit control, but under a factoring arrangement, these are managed by an agent such as LTSBCF.
Jon Adams added: "During the past decade the number of businesses tuning in to the benefits of asset based lending has dramatically increased.
"Although the FDA figures illustrate the company's performance during 2003, the positive signs in the pick up of the industry have rolled over into this year and we are already seeing an increase in deal activity, particularly management buy outs and other transactional deals."
Lloyds TSB Commercial Finance is part of the Lloyds TSB Group plc.
Lloyds TSB Commercial Finance is part of the Lloyds TSB Group plc.
