An increasing number of SMEs are becoming aware of the potential to use asset finance as a short-term means of accessing capital funds, according to a United Trust Bank report. The financial analyst found that 64% of 119 brokers surveyed believe that awareness of the technique has increased among SMEs in recent years. Read More
The financial analyst found that 64% of 119 brokers surveyed believe that awareness of the technique has increased among SMEs in recent years.
Perhaps more significantly, asset finance is not being seen as an only-option method by many, with 89% of brokers expecting that it will continue to be used even if bank lending becomes easier to come by.
Martin Nixon, head of asset finance at United Trust Bank, says: “An overwhelming number of brokers believe that SMEs will continue to employ asset finance as a means of raising working capital even if the high-street banks make credit more available.”
This is possibly not because asset finance is the best method of raising the funds, but may instead be down to the greater level of convenience with which the funds can be accessed.
Mr Nixon claims that many of those SMEs who have used brokers and specialist lenders like United Trust Bank itself have seen “flexibility, speed and high levels of service”.
When turned down by their bank, and subsequently approved for asset finance via a UTB-assisted broker, he predicts that it could prove difficult for the bank to win back that SME’s custom later on.
Ultimately, however, it is likely that SMEs will access funds in the way that offers them the best balance between cost and convenience – and it remains to be seen how well the banks can compete with alternative lenders as the economy recovers.