UK inflation has jumped to a three-decade high of 7% - a rather rapid rise as a result of supply, skills and material shortages. These factors understandably inhibit growth and have a negative affect on business confidence.
With inflation and the consequent uplift in the costs of doing business, including fuel and energy, it is no wonder that business confidence is waning. However, looking forward, 44% of SMEs are expecting to grow and 26% are planning on taking on more staff. If you fall under one of these two categories, you might recognise the array of resources available to help you deal with any challenges that your business might face, including the Recovery Loan Scheme (which gives lenders a government-backed guarantee to encourage lending).
On the other hand, if you are not planning on expanding your business, it is important to note that business ambitions are growing. Despite the fact that some sectors are more exposed to cost rises and shortages than others, regardless of your sector, uncertain times mean that having a strong relationship with a finance brokerage is all the more important. This is particularly relevant given the common assumption that high street banks are best placed to provide business funding. There are in fact other lenders out there who can offer increasingly flexible finance solutions and provide quicker access to funds.
Asset Based Lending
Asset based lending exists purely for businesses and enables debt to be secured against collateral as a funding solution. By making regular payments with interest to use an asset over an agreed period, the full cost of buying outright is avoided, covering assets such as machinery, equipment and vehicles.
Businesses can also release equity from an owned asset to reinvest back into the company in order to either improve cash flow into the business or encourage growth.
Essentially, asset finance can help a company to own, lease or upgrade an asset, which can consist of anything of value that the business requires to function.
Applying For Asset Finance
Any business that requires access to assets can apply for asset finance, including startups, small businesses, medium businesses and even larger corporate entities. Many businesses from a variety of industries utilise this form of business finance to access or purchase expensive equipment without having to make such a large impact on their cash flow or working capital.
Asset finance is a broad term and refers to a variety of lending solutions. There are many flexible funding options available that are appropriate for the needs of all types of businesses.
Despite the apparent mood of deflation around inflation, optimism around the economic outlook is improving, with around 40% of UK SMEs expecting the economy to continue growing. Asset finance can accelerate growth as an attractive funding option to businesses across all industries with fixed repayments, quick access and the ability to unlock capital flexibly.
Sources: NACFB, Close Brothers Asset Finance Business Sentiment Index (“BSI”) https://issuu.com/nacfb/docs/april_2022/40?fr=sOGJkMDQ4NjMxMDU