- 08 Jun
Market Conditions Interview For The Recruiter
I had a conversation recently with a journalist that is preparing an article for The Recruiter magazine. He wanted to know how things were progressing in the invoice finance market, in the light of the recent pandemic and the associated lockdown.
Invoice Finance Market Conditions
My reply was that we are thankfully we are still able to do business. Some invoice finance providers have become more cautious about the customers that they will accept, and some have paused their new business pipelines until the lockdown is relaxed. However, others have risen to the challenge to embrace the situation. Notably, Optimum Finance launched their invoice finance application app to enable a 60 second response time for new enquiries, whereby they receive an approval decision, and a price quote, in under a minute based on 8 simple questions.
New Customer Enquiries
We are still seeing some enquiries for invoice finance, although less than we were prior to the lockdown. We have also seen a number of customers in our pipeline delayed until the lockdown is lifted, which is impacting new business volumes. This has been due to a mixture of influences. In some cases the customers are putting the brakes on until the lockdown is relaxed, in other cases it is the funder is taking that approach. Some customers are also waiting for volumes to pick up again, before the customer will need the funding against their debtor invoices.
Turnover Reductions & Opportunities
Some customer turnover volumes have reduced, but we have also seen some customers benefiting from the situation, for example supplying services and products to support the government with their crisis management plans e.g. supply of PPE and the supply of call centre services. Some customers have pivoted their businesses in order to focus on available types of work, away from their pre-pandemic focus that has dried up.
Recession & Government Loans
In my opinion, the forces at work behind the situation is that they are twofold. Firstly, if there is less growth in the economy, and indeed a recession. This is causing businesses to become more cautious about everything. At the start of this year, with Brexit and the election out of the way (at least for the time being), we saw enquiries increasing significantly based on confidence. That confidence has been lost in the wake of the lockdown.
The second influence is the availability of government backed loans, which may have reduced the uptake of invoice finance in some cases. These loans may have provided a temporary lifeline for some businesses, however our conversations with prospects suggest that there are still businesses where that funding is either not appropriate, not available or not enough to meet their cash needs.
As the restrictions begin to be lifted, we are hoping that confidence will start to return and we can all get back to the feeling of positivity about the UK economy and its potential, that was around at the beginning of this year.