Invoice financing provided to small- and medium-size enterprises (SMEs) rose towards the end of 2002, although the use of leasing by SMEs declined in the same period, according to the Bank of England's annual report Finance for Small Firms.
By December 2002, total advances by members of the Factors and Discounters Association (FDA) to SMEs were Ј4.5bn, a rise of 17 per cent over a year.
The growth in advances to firms with an annual turnover of less than Ј0.5m was particularly marked in final quarter of 2002.
The report notes that part of the increase in the number of firms using invoice financing could be attributed to the effects of the Brumark judgement, which made it more difficult for lenders to enforce a fixed (as opposed to floating) charge over receivables.
