Member Article

Small firms turn to asset finance

Small businesses are increasingly turning to asset based finance against a backdrop of incremental economic improvements in the UK.

Figures from the Asset Based Finance Association (ABFA) showed that during quarter one 2013, the number of small firms using asset based finance rose by 3%, or by 439 businesses.

The number of the UK and Ireland’s smallest businesses using this type of finance, which offers up to £500,000, reached over 15,000 firms who are using the funds for working capital and to fund growth.

ABFA said these figures demonstrated the highest levels of this type of borrowing amongst small firms for almost three years.

Overall, the number of companies using asset based finance rose by 9% in the first quarter in 2013 compared with quarter one last year, and hit lending figures of £63bn.

Total funding offered up by the industry to clients also increased, as members of ABFA received advances up from £15.3bn last year to £16.3bn in 2013.

ABFA said this figure was particularly poignant when compared with the contraction seen across other methods of finance to SMEs.

Kate Sharp, chief executive of ABFA, commented: “It is extremely heartening to see so many of the smallest businesses choosing to use asset based finance to fund their growth.

“Having recently surveyed accountants we know they say that access to funding is still a major issue for their clients.

“With some signs of confidence returning it becomes ever more important that firms can take advantage of the new opportunities that growth presents.

“This is where asset based finance already plays an important part, and our industry is ready and willing to do more to help fund the recovery.”

This was posted in Bdaily's Members' News section by Miranda Dobson .