Asset financing sees 16% jump among major companies

A recent survey carried out by the Asset Based Finance Association (ABFA) has shown a 16% increase, year on year, in the use of asset financing by large UK firms.

Asset based financing has become a mainstream form of funding, with the industry providing £5.1bn to large firms last year, totaling more than five times the amount borrowed in this way just 10 years ago.

With demand increasing across the board, both large firms and SMEs are choosing to finance their growth plans by borrowing against their physical or financial assets.

During last year, just 277 big Irish and UK firms raised money in this way. As of March 2014, 315 large firms were using asset based financing.

SMEs are also raising money in this fashion with increasing regularity. Statistics provided by the National Association of Commercial Finance Brokers (NACFB) show that their members are increasingly lending to SMEs.

In May alone, they lent more than £1bn to SMEs, £230m of which was provided using asset based lending vehicles. Demand for this type of financing is up by 19.8%, year on year.

Banks are still being cautious, and applying a loan from them is still a drawn-out process that many modern firms would rather avoid. Financing and leasing experts like DJB, on the other hand, have never been busier and demand looks set to continue to grow. The upturn in the economy is giving the UK’s businesses the confidence to expand again, and more and more of them are choosing asset finance solutions rather than traditional loans.

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