Variety is the spice of life... and business solutions

Posted: Tuesday, 20 June 2023 @ 10:17

‘Seek, and you will find’, isn't that how the saying goes? Well, when it comes to businesses, those with an appetite for growth and success will find support in the asset finance industry - that has been proven time and again and continues to be the case if the numbers are anything to go by.


New business growth in asset finance

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business grew in April 2023 by 12% compared with the same month in 2022. In addition, in the first four months of 2023, new business was 13% higher than in the same period in 2022. 

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “Asset finance supports business investment across all major industry sectors and business size.  New business provided to larger businesses grew by 27% in April, to the manufacturing sector increased by 30%, and to the services sector grew by 11%, compared with April 2022.”


Borrowing in a cautious climate

These numbers are indicative of how asset finance supports other industry growth and development in a way that is not being provided elsewhere. 

It shows that asset finance remains one of the key tools that businesses can rely on when it comes to management and growth, which is arguably the only way towards a better economic position overall. This is, in part, because loans from traditional banks are either not always forthcoming or available in a suitable format.

Although the economic forecast has improved - the IMF depicts a decline of 0.3% for the UK’s real GDP this year - an improvement on the 0.6% contraction it forecast previously - it’s still a tricky environment for businesses. The upshot is that the banking industry has little appetite for finance and investment.

However, the bank's caution is at odds with the appetite of business leaders. One report showed that 74% believe it to be a good time to invest in their future, up from 69% the year before. However, this is met with a profound lack of support. Martin McTague, national chair of the Federation of Small Businesses (FSB) said: “Our research has found that the success rate in the final quarter of last year for small businesses’ finance applications is, at 44%, the lowest it has been since the end of 2013." This was compounded by sharply rising interest rates adding to the sense of unpredictability.

This is where challenger banks and niche lenders come in. Leasing Life reported: “Some £35.5 billion of loans from challenger and specialist banks were made to SMEs last year, a record high and more than traditional lenders. As an alternative to bank loans, the success rate for asset finance applications tends to be high among SMEs.” 

They continued: “In 2022, £34 billion was provided in the form of asset finance to businesses, says the FLA, often to fund new equipment or software. This was a record level of annual asset finance new business to SMEs.”


Great minds think alike

While caution and due diligence is always encouraged in any business venture, if we don’t try we never succeed. For SMEs, a healthy business includes sensible cash flow and that often means looking at the strategic use of leasing and loans.  

One of the reasons that niche lenders in the asset finance sphere are so well aligned to SME development is because, often, we ourselves are SMEs. As a result, our product catalogue reflects the needs of businesses facing similar challenges and opportunities to the ones we understand. 

At Rivers, for example, we have designed our range of funding solutions to provide clients with practical, easy, and cost-effective capital that enables their business to grow sustainably. Options include business loans for companies seeking to borrow between £5,000 to £75,000 with repayment terms set between two-to-five-years and fixed interest rates. We also offer leasing and asset finance agreements, as well as block discounting for new and existing lenders to grow their own book. It’s that variety, carefully curated to meet the needs of businesses, that makes us able to facilitate growth. 

Speak to the team at Rivers about finding the right funding solution for you.


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