Whilst an absence of finance is still crippling many UK companies, it seems that it’s a lack of knowledge rather than an absence of funds that’s preventing British businesses from taking off.
A recent survey by the Finance & Leasing Association found that more than 60% of SMEs in the UK consider access to finance for new equipment or technology very or fairly difficult to come by. But could the reason for this be that most are still relying on their banks as the first port of call when they need a cash injection for their business?
A massive 78% of respondents cited banks as the source they would consult to find out about financing options, with just 40% turning to their accountants for advice and only 18% tapping into the expertise of brokers.
Perhaps this is the reason why almost a third of respondents confessed to not understanding what asset finance is and why a significant 13% had never even heard of it!
The data not only demonstrates that the asset finance sector needs to do more to educate the marketplace; it also highlights how much more the marketplace needs to do to explore a wider range of funding options.
The past few years have been testing times for business, with recession, contracted markets and squeezed margins creating an environment where it’s been difficult for many to survive…and some haven’t.
The real test, however, is now. With a return to growth comes a renewed imperative to be ready for growth. That means investing in your business so that you have the equipment, technology and resources to cope with new customers, new contracts and new opportunities.
Asset finance is an ideal way for many companies to leverage existing value within their business to generate future value for their long term sustainability. Using existing assets to borrow capital while retaining the ability to utilise those assets as part of a growth strategy makes sound commercial sense.
The only sticking point is the lack of understanding of the finance sector amongst SMEs. It’s up to all those that advise SMEs as well as the asset finance sector itself to close the information gap between the need for funding and the most accessible routes to affordable finance.
For more information on how asset finance can help you, call us today on 0333 323 7800.