Something’s different. As Brexit builds to a close, there’s more confidence in the air. It’s all down to alternative asset finance – and what the Finance Leasing Association (FLA) have to say about it.
A fresh FLA report has come at the perfect time. We’d like to highlight the implications for your business and its growth plans in the coming decade.
Asset finance new business rises by 5%
On 6th November 2019, the FLA published its comparative asset finance growth of Q3 this year and Q3 in 2018. The result? A 5% increase.
In total, Q3 has granted £8.4 billion to business owners around the country. Annually, 2019 has hit a record £34.5 billion so far. It comes at a time when British banks are reserving just 2% of their balance sheets to lend to SMEs.
September was a particularly fruitful period – the FLA’s Head of Research and Chief Economist, Geraldine Kilkelly, was very positive about asset lending in the manufacturing sector. “In September,” she said, “the asset finance industry reported its strongest growth in new finance for plant and machinery since January 2019.” She’s referring to a 15% increase to £623 million, while business car leasing jumped 4% to £712 million in the same month.
Although September’s product finance leasing was down by 8%, it did nothing to halt the year-on-year rise in overall asset finance. More and more businesses are paying for their assets incrementally, using finance beyond the big banks.
There was good news for brokers too. Stats for broker-introduced finance climbed 4%, hitting £541 million. It’s indicative of the valuable role that experts play in the sourcing and matching of investment channels to SMEs in need.
Why is this happening?
As with much else in the UK right now, it comes back to Brexit – specifically the new January exit date.
Kilkelly herself has drawn a link between the increase in requested plant and machinery finance and extra tariffs post-Brexit, which may lead to an increased reliance on the UK manufacturing sector. She added: “The industry has seen total new business grow in all but one month so far in 2019.” This points to the confidence of alternative lenders, who are helping businesses thrive as usual and even stimulating more opportunities as we prepare to leave the EU.
At Johnson Reed, we’ve seen the same thing in action. Brexit is a daunting prospect to the unprepared, but it’s one we’re able to cushion with the right alternative finance packages. We’d like to thank our clients and referees for their support. Both our short- and long-term leasing figures are up too, reflecting the stats released by the FLA.
Are you ready to take charge of your potential? Speak to us for common-sense finance as your future takes shape, in whatever way that may be.