ABFA appoints new chairman as quarterly sales break £71bn mark for first time

Morrin martin

Martin Morrin, managing director of Royal Bank of Scotland Invoice Finance, has been appointed the new chairman of the Asset Based Finance Association (ABFA).

Morrin was previously the ABFA’s vice chair and takes over the new role from John Onslow, Centric Commercial Finance.

He is one of the most respected figures in the asset based finance world, having first joined the RBS Group back in 1986 and been a founding member of Royal Bank of Scotland Invoice Finance. He has held a variety of management positions at RBS Invoice Finance and twice been its managing director (from 1997-2000 / 2007 – current). He has also previously been the director of asset based lending at Barclays Bank and managing director of First Capital Cashflow, a business he set up.

Commenting on his election as chairman of the ABFA, Morrin said: “With the wider economy finally growing and the industry as a whole continuing to perform strongly, now is an exciting time to become the ABFA’s chairman. It is also vitally important we continue to support the industry around the ABFA’s new regulatory framework and that we further promote the availability of funding businesses in the SME and corporate sectors. It’s an honour to become the chairman of the ABFA; I look forward to representing it and the wider industry and hopefully continuing to see strong growth in the sector.”

Kate Sharp, chief executive officer of the ABFA, added: “Martin has long been an influential figure in the industry, not only by being head of a large provider but also through his previous work with the ABFA as chair of the educational committee. We are very pleased to have him as the new chair of the ABFA.”

The appointment follows the latest quarterly figures (Q3 2013) from the ABFA which show the industry and its clients are continuing to perform strongly. The industry is currently supporting over 43,000 businesses.

Total sales from businesses supported by asset based finance broke £71bn for Q3 2013, the strongest ever quarterly performance. This is up by some 14% on the same period the previous year. Total client turnover for 2013 to date stands at more than £202bn; with asset based financiers projected to support over £270bn of client turnover for the full year. This would be an increase of over 6% on 2012’s record total.

At the close of Q3, ABFA members had total advances out to clients of some £17.4bn, up 6% on the same period in 2012 (£16.4bn). This is only the fifth time the funding balance has been above £17bn and the industry has achieved this milestone in both of the last quarters. This demonstrates that the demand for asset based finance is strong and growing, with firms increasingly using it to fund growth and their working capital requirements.

This contrasts markedly with the wider lending picture, with net lending overall continuing to fall at an alarming rate. Net lending to SMEs contracted by £1.4bn in Q3 2013 continuing its general trend throughout 2013.

Asset based financiers are most active supporting the services (30%), manufacturing (29%), distribution (24%), transport (7%) and construction (5%) sectors.

The industry is reporting particularly strong demand in the services sector from the recruitment industry. This sector is often seen as a bellwether and with demand in this area indicating firms are increasingly confident and looking to take on more staff.

Sharp commented on the latest figures: “With the OECD revising upwards their predictions for the UK economy and stronger than expected GDP figures, the recovery is clearly well underway. The latest figures show that the asset based finance industry is playing a central part in the recovery, with record client sales figures for the last quarter and continued growth year on year in the funding balance.

“The strong demand for this type of funding from small and large companies alike is heartening; so too is the diverse sectoral split. Firms which need finance should be speaking to their funders and advisers about asset based finance as the industry can help many more firms grow and take full advantage of the economic recovery.”