The Institute for Factors and Discounters reports that receivables finance increased by 2% in the September quarter, compared to the previous quarter.
Receivables finance is financing provided to small businesses so that payment is received promptly, rather than having to wait for an extended period to be paid by the companies they are supplying.
However, while the September quarter result was an improvement, it was still down 6.8% on the 2008 September quarter.
Across 6,000 businesses, the average period for debt payment was 42.7 days in the last quarter, a one day improvement on the June quarter, and the June quarter was a one day improvement on the quarter before that.
With discounting, Institute member firms buy the small company’s debt but leave them with the job of collecting the debt. Factoring is where Institute member firms buy the debt and accept some of the responsibility for collecting the debt.
So this is an indicator that small businesses are starting to see an improvement in sales results. Because receivables finance is primarily a service for smaller firms, it is a good measurement of the state of the sales activity of smaller companies.
This is important since, according to UK Trade & industry, small UK businesses provide 59.2% of private sector employment and 51.2% of total private sector revenue.
We assist small UK firms by providing them with qualified prospects at no cost to them from our Local Search facility in our Business Directory. There are 1.6 million business listed in our directory, most of which are small companies.
Monte Huebsch, CEO
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