Asset-based Funding Jumps 10% to Reach Five-year High
£23.9bn borrowed in leasing by small and mid-sized businesses last year
Business investment obtained through leasing has jumped 10% in the last year to reach a five-year high, according to a new report.
Research by finance provider the LDF revealed that asset finance has steadily increased in popularity since the recession as an increasing amount of businesses have found it difficult to secure vital funding through more traditional lending streams.
The amount of funding obtained through asset finance, which allows businesses to borrow the cost of a capital investment upfront and spread the repayments across fixed monthly payments, has increased by £4.3bn since 2009/10, jumping from £21.7bn to £23.9bn within the last year alone.
As well as monitoring the amount of investment obtained over the last five years, the LDF’s report also revealed that many small and mid-sized firms used the finance to invest in assets that drive growth, such as updating IT systems and business premises.
Managing director of LDF, Peter Alderson, commented on the findings: “More businesses are using leasing to invest in assets to drive growth, and that’s a sign that an increasing number of small and mid-sized businesses are recognising its benefits.”
“While many other forms of lending remain relatively constrained, the availability of asset finance makes it hugely attractive in comparison.”