Following the release of a report by SmallBusiness.co.uk showing that there is more room for invoice finance growth, the government has unveiled a new £45 million funding package for small businesses with a focus on new financing models.

The timing and content of the two releases is certainly illuminating. The new survey concludes that while invoice finance is an increasingly popular funding mechanism, thanks in part to the fact it can swiftly and securely provide access to SME credit for growth, a significant proportion of small businesses are still unaware of the finance product and its benefits.

At the same time, speaking at the launch of the first the British Business Bank SME funding package, which includes a £10 million start-up fund for entrepreneurial scientists, a £1 million sector-specific mentoring scheme and a new business support website (www.greatbusiness.gov.uk), Business Secretary Vince Cable underlined the need to continue to develop the role of innovative, alternative and non-bank finance services, such as peer-to-peer lending and invoice finance.

He also suggested that the development of new channels, such as peer-to-peer lending and invoice finance, will be part of the British Business Bank’s funding strategy as it ploughs £300 million into improving access to SME finance.

Hence, the two developments suggest that the presence and popularity of invoice finance, and other alternative SME finance products, will only continue to grow going forward. Growing interest and investment in such services from mainstream lenders, including Santander and Barclays, only strengthens this forecast.

The UK economy is showing signs of steady, if gradual, growth and SME optimism is growing. Recent evidence suggests that invoice finance will play a key role in ensuring that this confidence and growth continues.

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