machinery

SMEs fail to utilise asset-based lending




Almost three-quarters (72%) of SMEs are not aware of opportunities to secure funding based on their turnover, according to a new study by Close Brothers Invoice Finance.

While 44% of SMEs claimed they would consider asset-based lending over a loan or an overdraft, only 16% said it was their ideal form of business finance.

David Thomson of Close Brothers said: “The findings of our research are disappointing because for many SMEs asset-based lending offers key benefits over other types of finance, including greater flexibility, fewer covenants, scalability and ease of access.

“If SMEs were better informed about how asset-based lending works, many more would put it to good use in their businesses.”

Close Brothers also found that 69% of SMEs with an annual turnover of £10m or more have capital tied up in assets such as plants, machinery, property and stock.

David added: “Asset-based lending is a source of real untapped potential for SMEs.

“We know that a lack of access to finance is a real barrier to growth for many businesses with huge drive and ambition, but the secret to securing this funding is often to be found in the assets the business has.”

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