UK Finance has reported that invoice finance and asset-based lending stood at £23.4 billion at the end of 2017, up 5% on the funds advanced at the end of 2016.
The number of clients remained stable at around 42,000.
Invoice finance and asset-based lending to small businesses (those with annual turnovers of less than £500,000) increased by 19% in December 2017 compared to the previous year, with advances worth a total of £833 million.
Annual sales of clients supported by invoice finance and asset-based lending stood at a record £311 billion in 2017, up four% on 2016.
Annual sales from clients through export invoice discounting facilities stood at £27 billion in 2017, up 21% on 2016.
Matthew Davies, director of invoice finance and asset based lending at UK Finance, said: “These figures show a continuing increase in the use of invoice finance and asset-based lending, particularly amongst smaller firms.
“This reflects a growing appetite for finance amongst those small businesses that are already using external funding.
“These forms of finance can provide extra flexibility and improved liquidity for firms, unlocking working capital to help them grow and invest as well as allowing them to support their own suppliers.
“The industry will continue to work to increase awareness amongst businesses about the different sources of finance that might be appropriate for them.”