Asset-Based Funding to UK Manufacturing Businesses Hits £2.41bn
As bank lending continues to decrease, more UK manufacturers are turning to alternative finance routes with asset-based finance up 20% since recession
Asset-based funding among UK manufacturers has increased dramatically in the last five years growing by 20% to £2.41bn, according to research by the business finance group the LDF.
The analysis, which looked at data from over 100,000 UK enterprises, indicated that an increasing number of UK manufacturing businesses are choosing asset finance for growth as bank lending continues to drop, falling 14% since 2010.
The report also looked at what subsectors were using the alternative finance route the most, with alcoholic drink producers topping the list at 26.2%; followed by metal production (16.4%); food and drink (11.5%); pharmaceuticals (5.3%); cars (4.7%); plastics (4.4%); machinery (4.1%); electronics (3.9%); chemicals (3.8%) and aerospace businesses (3%).
Peter Alderson, managing director of LDF, commented on the findings:
“Our research suggests that as UK manufacturing starts to build on its post-recession recovery, more and more businesses in the sector are recognising the value of leasing as an important source of finance to help them capitalise on growing demand.”
“Since leasing allows manufacturers to invest in machinery and other equipment without making large upfront capital commitments, many are finding it a very appealing way of funding the critical infrastructure, tools and systems they need as business activity picks up.”
For more information on alternative finance and funding options in general, check out Startups.co.uk’s raising finance section here.