Posted: Tuesday, 31 May 2022 @ 09:59
As we head towards the Platinum Jubilee and another four day bank holiday, there are lots of things for everyone to look forward to, whether it's barbecues in the garden at home, watching events on TV, heading to a street party or joining the festivities in central London.
The occasion is bringing out a level of creativity and ingenuity that you could only find in the UK (I believe the BBC reported on a pack of corgi puppets that will be paraded as part of the Platinum Jubilee Pageant - naturally).
However, right now ingenuity is showing itself in other, perhaps less festive ways as well, and it's a characteristic that has always served the Brits in good stead.
British business are pushing forwards
The entrepreneurial spirit amongst the UK's businesses, especially its SMEs, is alive and pushing back against the tide of negative headlines. Where that's highly evident is in the activity seen within the asset finance industry in the first half of 2022.
To date, lots of businesses within the asset finance community have reported record months. The implication is that businesses are doing things - they are buying equipment, they are investing in themselves, and they are driving things forwards.
Of course, we all proceed with caution. However, that only serves to show that investment is broadly being done mindfully rather than recklessly. The ONS reported that business investment grew by 0.9% in Quarter 4 of 2021, and while overall investment fell in the first quarter of 2022, gross fixed capital formation (GFCF) increased by 5.4%. The gap between pre-pandemic levels of business investment is shrinking, but GFCF has exceeded pre-coronavirus levels.
Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:
"In March, the asset finance market reported its strongest performance for three years as the monthly new business total reached more than £3.6 billion. Finance for high value projects boosted growth with new lending to large corporates up by 21%. New lending to SMEs was also strong, increasing by 10% compared with March 2021."
She continued that despite the more recent squeeze the country has been experiencing on profit margins and household incomes, business investment remains strong and asset finance continues to be critical for companies to push forward. That is especially important in periods of uncertainty “with the asset finance industry financing as much as 40% of UK investment in machinery and equipment”.
The importance of British SMEs
While the government endeavours to work out its role in the myriad of challenges that people face, businesses have both a challenge and an opportunity to take some of the situation in hand. If we can surge forward - grow, employ, and so forth - these are the things we know will help to provide longer-term benefits for the country as a whole. We have often quoted the stats detailing the importance of SMEs to the UK economy and our collective financial wellbeing:
- They account for 99.9% of the business population
- There were an estimated 5.6 million private SMEs at the start of 2021
- They employ around 16.3 million people
- They accounted for 52% of turnover at the start of 2021
As for us, we have always been champions of two things in business: a creative spirit and sustainable growth. It's how we work, it's something we value in our clients and our partners, and it seems we are in good company.Find out more about business loans, leasing, asset finance or our incubator block service for business owners, suppliers or brokers with Rivers Leasing.