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UK businesses are turning more to asset finance to invest in new business equipment for growth according to recent statistics released by the Finance and Leasing Association (FLA) earlier this month, (November, 6).[1]

The figures suggest a high growth in companies turning to asset finance meaning that asset finance saw its highest monthly figure of new business in almost six years during September 2014 reaching more than £2.5 million.

Investments in business equipment and SME’s and companies taking up asset finance options for this was up 53% during September compared with the same time in 2013 while new car finance grew by 30%.

As a method of speculative investment for company growth, asset finance offers a number of options for companies to fund purchases such as updating IT systems, networks, refitting offices and purchasing new company vehicles spreading the cost of the purchase over the lifetime of the asset in various ways.

It is claimed that asset finance’s growth is attributed to the number of companies opposing traditional lending methods which offer little incentive or support and are often more difficult to secure following the consequences of the recession.

It is also believed that the growth is attributed to small and medium firms who were experiencing increased levels of growth and demand for services and required more assets.

A spokesperson for the FLA suggested that asset finance, through the provision of hire purchase and lease purchase agreements, was helping UK businesses to invest and therefore grow.

The figures from September also suggest that plant and machinery finance and commercial vehicle finance were up on last year’s figures for September.

If you want to explore alternative methods of business growth for your SME or business then Davies Corporate Finance can help by using our network of funders allowing us to secure the best and most cost effective method of asset finance against the capital items your business wants to purchase.



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