Venture Finance has reported increases in new client numbers for the third quarter running. The independent Invoice and Asset Based Lender has witnessed an increase of over 75 per cent in its Q1 new client numbers, compared with Q1 2009. New clients taking Bad Debt Protection to shield against customer insolvency also grew by over a third. These figures support an emerging trend of a better-organised and prepared class of businesses, seasoned by the recession.

Recent figures from BDO LLP, however, note the current levels of business insolvency are not as high as had been predicted for the recession: declining since reaching a peak early in 2009. With businesses appear to have taken steps to gear themselves up for recovery and beyond through more appropriate funding services, such as Invoice and Asset Based Lending.

Businesses were initially driven to ABL services early in the downturn for their accessibility and reliability as banks closed their doors, but the last few months have seen a greater importance placed on ABL’s dynamic link to sales performance. The industry is uniquely equipped to protect against overtrading by ensuring an appropriate flow of funding to a business: a telling survival factor during the recovery.

Experience suggests insolvency levels can increase in the period after a recession and a growth in the number of Venture clients, both new and existing, taking Bad Debt Protection, points to a generalised heeding of R3’s warnings earlier this year of expected record insolvency levels in 2010.

Peter Ewen, Managing Director, Venture Finance, comments: “Our figures suggest UK businesses have become better acquainted with other funding options and services, beyond traditional funding, as a result of the recession. Of course I am pleased to be able to report a positive quarter for Venture, but the implications for the bigger economic picture are positive too, especially when considered in light of BDO’s recent insolvency figures. To my mind they both point to an emerging and positive trend of ‘canny preparedness’ when it comes to business behaviour during the recovery.
 
“Clearly it is still very difficult for business leaders and, although insolvency levels might not be as high as first thought, we are far from out of the woods. I am encouraged that UK businesses are recognising the value of funding services which are dynamically linked to sales performance and automatically adjusting to growth, as well as mechanisms to shield against undisputed customer default, especially in the face of a general ‘toughening up’ from creditors.”