The latest quarterly economic survey from the British Chambers of Commerce (BCC) has noted an upturn in SME performance and confidence for 2013. However, it is clear that these green shoots need nurturing. Invoice finance has a key role to play.

According to the BCC, both the manufacturing and service sectors posted stronger balances in the last three months of 2012, an improvement that helped the state of the economy over that period. At the same time, business investment and confidence strengthened, although the organisation points out that both remain historically weak. Notably, cash flow balances, though higher, remain weak overall.

So, how do we turn this burgeoning optimism into tangible growth in 2013? Well, the BCC believes that the economy, and the business sector in particular, still needs help if we are to witness a healthier 12 months. Where will this impetus come from? The British Business Bank is singled out as a key source and the Start-Up Loan Scheme is also worth mentioning, as is the Funding for Lending scheme.

However, there is a missing piece to this picture. For all the back-slapping over a new SME bank, details remain unclear, notably with regard to its components and launch date, and while the recent expansion of funding for the Start-Up Loan Scheme is a positive, greater access to start-up funding is only part of the solution. As for Funding for Lending, while the scheme is starting to pay dividends in terms of mortgage lending, progress has been slower in terms of small business funding.

As traditional banks and building societies continue to demonstrate cautious attitudes to SME lending, it is clear what the missing piece is, with more and more small businesses making use of alternative finance services. If 2012 was a watershed year for services such as invoice discounting and factoring, 2013 looks to be the year in which such services cement their position in the small business lending mainstream. So, yes, alternative finance will underpin 2013 business growth.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.