Asset Based Lending
The Asset Based Finance Association (“ABFA”) is a UK and Ireland focused trade association representing companies that provide Factoring, Invoice Discounting and Asset Based Lending services. Its members are said to have been supplying theses services for over forty years albeit Factoring has been around as a product for hundreds of years in one guise or another.
The generic term “Asset based Lending” has only been around for the last five years. It is meant to encapsulate the expansion of Factoring and Invoice Discounting Companies services to include services like Asset & Stock Finance, Credit Cards or other business financial service products bundled together.
Originally, the trade association was called the Association of British Factors and Discounters and was founded in 1976. They merged with another UK rival industry association in 1996 and became the unified UK and Irish industry association changing their name to the Asset Based Lenders Association in 1996.
The industry has circa 45 members including all the major UK high Street Banks with the aim of promoting & representing the interests of members. The ABFA lists their main activities as:
- Education and Training
- Industry News
- Member Guidelines
- Public Relations
- Source of Industry Information
- Industry Statistics
The invoice-financing sector is unregulated by the Financial Services Authority and is probably the largest segment of business financial services market to remain so. The Asset Based Lenders Association is a self-regulated body. The Chairman and Vice-Chairman are elected by the Members from the members and serve one year each, with the Vice-Chairman going on to be become Chairman after a year in the supportive role. Currently there are 11 members on the Executive Committee who represent a cross section of the Member companies and who are voted onto the Executive and put up for re-election by the Members once a year.
Asset Based Lenders Association Membership Criteria
There are three different tiers of ABFA membership:
- Full Member
- Group Member
- World-wide Associate Member
Full Membership of the ABFA is open to UK and Irish companies only. World-wide
Group Membership is open to any company belonging to a group where there is
at least one Full ABFA Member. World-wide Associate Membership is designed for
any company where there is no Full ABFA Member.
In addition, in order to be a Full Member of the ABFA an organisation must meet
the following requirements:
- Be established for more than 12 months
- Have a net worth of over £1 million
- 75% of the business must come from Asset Based Finance
- Their clients’ debts must not have been pledged to any lenders beyond that advanced to each individual client
To learn more about the Invoice finance market please contact us.