According to the results of the latest quarterly Business Barometer* from Close Brothers Asset Finance, alternative forms of finance are gaining increasing ground in the manufacturing sector as almost half (46 percent) of firms surveyed consider access to funding to be a challenge.
The survey showed that 16 percent of manufacturing firms are opting to use asset finance as their main form of business funding, whilst a further 16 percent are relying on personal finance.
Some 19 percent of firms polled in the sector said they still use bank overdrafts as their main form of business funding and 17 percent depend on bank loans.
“It’s interesting to see that so many manufacturing firms are opting to use alternative forms of funding such as personal finance and asset finance, given that bank lending was traditionally the main source of finance for so many companies,” commented Steve Gee, Managing Director of the Industrial Equipment Division at Close Brothers Asset Finance.
“It’s particularly surprising that so many are relying on personal finance when there are so many other viable ways to finance your business without drawing upon your personal resources.”
The survey revealed thatjust under a quarter cited obtaining finance and cash flow as their biggest barrier to business growth
“With access to finance still a major issue facing the industry, we would urge all firms to widen their search and evaluate all the means of funding available to them,” Gee continued.
“Asset finance is a flexible form of funding that enables firms to unlock the capital tied up in their existing assets, proving a cash boost to the business that can be used to facilitate plans for expansion. It takes physical assets and makes them work harder, giving greater financial freedom for businesses.”
*All figures, unless otherwise stated, are from a GMI survey conducted in June 2015. The survey canvassed the opinion of over 500 SME owners across the UK and across several industries on a range of issues affecting their businesses. This survey was conducted online.