More and more SME’s choosing asset finance over traditional bank funding – here’s why.
Figures released by the Finance & Leasing Association (FLA) have shown a 13% growth in total asset finance new business (leasing and hire purchase) in comparison to same month in 2022 (May).
The UK’s asset finance industry has displayed resolve, a strength and resilience in what is currently an uncertain economy. Many asset finance businesses have seen and used the challenging economic environment as an opportunity for growth and sustainability and tackled the issues and uncertainties head-on.
The value of this sector is becoming an increasingly popular financing solution for SMEs who are now more likely to fund new assets and equipment through leasing rather than any other finance stream.
The Opportunity in Change report found that 1/3 of SMEs plan to fund expansion, equipment or investment through leasing, making it the preferred choice over credit cards, bank loans or any other finance method.
This, in correlation with rising business confidence mean that the majority of business in the study (50%) are aiming to invest in the next year, seeing an increase of over 10% in the last 2 years. Demonstrating evidence that the asset finance market could increase further in the next 12 months.
Geraldine Kilkenny, Director of Research and Chief Economist at the FLA commented: “The asset finance market reported a thirteenth consecutive month of growth in May as the trends of higher average advances across asset finance sectors…lending to larger businesses was up by a third in May, and to SMEs grew by 4% in line with the previous month”
As well as the impressive determination from the asset finance market, some other factors are contributing to the growth in asset finance, particularly among SMEs:
- More businesses have a commitment to sustainability which is fundamental to leasing. New equipment has much less environmental impact and 97% of businesses either have, or are planning to adapt to be more sustainable.
- More people now are much more comfortable with subscription based products and SMEs are adapting to this. 2/3 of SMEs would now consider creating a subscription for their products, increasing by 164% from 2 years ago.
As the future of leasing is being promisingly shaped, now may be the time to shape the future of your business. See why asset finance is more popular and effective than traditional banking – look at our finance options to find the one that suits you!
The Opportunity in Change report is available to download, here: https://www.acquisinsurance.com/research-report-opportunity-in-change/
