Leasing hits five-year high as businesses secure crucial funding through asset finance
– More businesses realising benefits of asset finance as £23.9 billion is borrowed in the last year alone
The amount borrowed by businesses through leasing to fund business investment has reached a five-year high, jumping 10% in the last year alone, as more businesses embrace asset finance as an alternative to traditional loans, according to LDF, a leading finance provider.
LDF explains that the amount borrowed by businesses through asset finance has risen 10% to £23.9bn in 2013/14, up from £21.7bn in 2012/13*. Asset finance has grown in popularity since the recession as many businesses have found it difficult to secure the traditional lending that was their mainstay prior to the credit crunch.
Leasing hits five-year high as businesses return to investment in growth
LDF explains that asset finance allows businesses to borrow the cost of a capital investment upfront, and spread the repayments across fixed monthly payments, helping businesses to clarify their budgets and contain costs.
LDF explains that many SMEs use asset finance to fund purchases such as updating their IT systems, office refits and other assets such as commercial vehicles, which may have fallen to the bottom of their priority list during the credit crunch.
Peter Alderson, managing director of LDF said: “More businesses are using leasing to invest in assets to drive growth, and that’s a sign that an increasing number of SMEs are recognising its benefits.
“As the economy improves, SME’s are seeing order book growth, and are looking to catch up on several years of delayed investment. While many other forms of lending remain relatively constrained, the availability of asset finance makes it hugely attractive in comparison.”
LDF expands asset finance capabilities to meet demand
LDF adds that it is currently increasing its funding of SMEs through asset finance brokers to meet increased levels of demand from small businesses.
It says that its expansion plans are supported by systems that give brokers and their customers some of the fastest decision times in the asset finance industry. LDF can provide brokers with decisions on credit applications in an average of four to five hours, compared with 24-hour turnaround times among many other asset finance providers.
Peter Alderson continued: “As more businesses are realising the benefits of leasing, we at LDF are stepping up our offer to SMEs and providing more funding than ever before on our own book.
“A key feature of leasing for businesses is the reliability it offers them. A quick decision and immediate funding means that they can focus all their efforts on growing their businesses as soon as possible, rather than being on pause for a lengthy period of time before a decision is made.
“Our relationship with our broker partners is set to become much closer over the coming months as we ramp up the funding we provide.”
*Year end July 31 2014
