According to recent reports, where a small business is located can have a big impact on how likely it will receive funding. While some areas offer excellent prospects for funding others are virtually feeding of scraps according to statistics.
Figures from 2016 show that businesses that benefitted from the Bank Referral Scheme totalled only 900 out of the 19,000 that had been referred after failing to secure loans from high street lenders. Looking deeper into the stats just 75 of these companies was located in in the North West.
Looking at more recent figures from UK Finance, things haven’t changed much when it comes to loan approvals by UK region. All regions saw a year on year fall in loan approvals in the final quarter of 2017 apart from Wales which saw a 55% increase compared to 7.6% decline for England.
The statistics show banks still a have a long way to go before they have sufficient trust in lending to small businesses throughout the UK with the exception of Wales.
To get around this problem, businesses should consider alternative forms of business finance to support ambitious growth plans such as asset financing.
According to the latest figures release by the FLA new asset finance business grew 9% in October 2018 compared the previous year. Many businesses will be benefiting from the boost this will contribute towards business development and growth but if you are considering joining the growing number of businesses who benefit from asset finance it is important to ensure you select the right asset finance for your business.
Most business owners opt for asset finance when much like taking on any other type of business loan they require funding. For example, they may wish to lease an asset if they want to spread the cost over its lifetime. This avoids the pitfalls of rapid depreciation of assets.
Asset finance however comes in many forms including finance lease, hire purchase and it is important to compare these against other products such as commercial loans. While the benefits of asset finance are often clear it is worth consulting a qualified expert to discuss what is best for the business both in the short and long term.
You will find a wealth of information on the different options available on our website or you can give us a call and speak to one of our advisors to find out how asset finance can work for your business.
According to the most recent figures released by Finance & Leasing Association (FLA) new business in the asset finance sector increased by 9% year on year in the month of October. This indicates that Brexit uncertainty hasn’t put off firms looking to use asset finance to grow and develop their businesses.
With asset finance covering several sectors, some areas have shown even more spectacular growth than the overall figure suggests. Machinery finance for example showed growth of 16% compared to October 2017 while business equipment finance was up 29% which is nearly one third up. The commercial vehicle sector also saw an increase of 23%.
These figures represent a strong end to the 2018 which began with similarly positive increases in new business in the construction and agricultural asset finance sectors. The asset finance sector is on course for another record-breaking year which will come as welcome news as bank lending to business continues to show a decline in loan approvals across much of the UK.
Despite the good overall news, technology equipment finance saw a fall in new business which pushed the overall figure down. It will be interesting to see if growth in new asset finance business is maintained in 2019.
As we start the new year many of us will have plans to expand our business or perhaps look at new products and services. This may not be possible, however, without the extra costs involved in purchasing new equipment, new software and so on.
This extra cost burden can be off putting but if you take advantage of the Annual Investment Allowance (AIA) did you know that you can offset your investment in equipment and technology against tax?
Better still you can offset 100% of the investment against your taxable business income so not only do you get to improve your business operation and innovate, you can also reduce your tax burden at the same time. The allowance was also recently increased from £200k to £1million.
If you are planning to take advantage of the AIA this year you can use asset finance to spread the cost rather than invest all the cash in your business up front. This multiplies the benefit to your business.
The AIA was originally introduced in 2008 and the recent increase from £200k to £1million is designed to help stimulate investment in business at a time when it will be needed more than ever in the UK.