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History of factoring
The concept of invoice factoring originated over 200 years ago in the United States, but it was not until the 1960's that the first factoring services were introduced into the UK. In the early years factoring had a poor reputation, being seen as a lender of last resort.
The Association of British Factors (ABF) was formed in 1976 by which time a number of the UK's clearing banks had either bought in to the market or started their own operations. As a result factoring's image began to improve.
Invoice Discounting
The market really started to take off in the 1980's with the introduction of invoice discounting and with an annual growth rate of 20% invoice discounting soon overtook factoring volume. This attracted many new entrants, some of them foreign owned until today there are over 50 providers of factoring and invoice discounting in the UK.
Factors and Discounters Association
In 1996 the ABF merged with AIF and CFA European Chapter to form the Factors & Discounters Association (FDA). The latest available statistics from the FDA show:
| FDA Statistics | 2006 | % inc | 2007 Q1 | Increase |
| Total Volume | £173 billion | |||
| Total Advanced | £13.6 billion | |||
| Total Clients | 46.915 | |||
| FDA Volume | ||||
| Domestic Factoring | 19bn | 4% | 4.7bn | 7% |
| Domestic Invoice Discounting | 145bn | 17% | 37.7bn | 11% |
| Export Factoring | 2.33bn | 116% | 0.5bn | 19% |
| Export Invoice Discounting | 5.69bn | 31% | 1.5bn | 11% |
| Import Factoring | 1.14bn | 18% | 0.3bn | 18% |
| FDA Client Numbers | ||||
| Domestic Factoring | 22.325 | 8% | 22.666 | 7% |
| Domestic Invoice Discounting | 18.276 | 10% | 18.730 | 9% |
| Export | 3.586 | 12% | 3.759 | 7% |
| Import | 2.623 | -2% | 2.531 | -10% |
With thanks to Factors & Discounters Association for kindly providing this information.
