Asset Finance grows in popularity with UK companies

A report released by the EEF, the Manufacturers' Association, has shown that Asset finance remains the most popular form of external finance chosen by Britain's companies. 86% of British manufacturers that took external finance over the last 3 years have opted for Asset finance as part of their funding mix, a number which is far higher than those who have used loans or overdrafts. When asked the reason why asset finance was their preferred method, many cited the fact that there is certainty around the entire cost of finance as the primary driver. Indeed on this  basis the statistics are unlikely to change in the future and the survey reflected confidence around this view too. Regarding the assets that manufacturers deem most suitable for asset finance, the most popular was plant and machinery (67%), the vehicles (50%) and hardware/software (23%). When if comes to the type of asset finance used, the report revealed that the most popular types remain contract hire, finance lease and hire purchase with over two-tirds of respondents saying they had used or are using one of these forms of asset finance just now. But perhaps the most telling statistic from the report is that over two-thirds of firms said their preferred method of financing a new asset was from internal funds. It can be suggested that this is both a result of a relative dearth of external funding (compared with, say, 5 years ago) and perhaps also a new mentality among British manufacturers not to rely as much on leverage as they have done in the past - perhaps like all businesses they have learned some harsh lessons about this in the past few years. Indeed just over a fifth of all respondents to the survey even said they had not sought any external finance in the last three years and would prefer not to get themselves into debt - a telling statistic indeed. Nevertheless it seems Asset finance remains a staple among the financing mix for most UK manufacturers and companies and will continue to remain so for the immediate future. At Choice Loans we can offer you access to a wide number of asset finance options. To make an enquiry either complete our Asset Finance Enquiry form here or call us on 0845 1260350.