Asset-based lending for UK businesses reaches record high
Asset-based lending to businesses in the UK has reached a record high, helping to bridge the funding gap, according to the Asset Based Finance Association (ABFA).
Figures showed that asset-based lending has reached £4.3 billion, up by 22 per cent from last year and 71 per cent since 2011.
There has also been an increase in finance available against stock, up from £2.4 billion to £2.9 billion in the past three months, whilst finance available against plant and machinery has also risen, reaching £1.1 billion.
Asset-based lending provides an alternative form of finance for businesses that are unable to obtain finance through traditional forms such as loans and overdrafts, and has helped to bridge the funding gap.
More businesses are now being made aware of asset-based lending as an alternative option following the economic uncertainty surrounding the Brexit vote.
Earlier this year, the Government launched a new bank referral scheme, which will see nine of the UK’s major banks referring businesses that they are unable to support financially to alternative finance platforms, including asset-based finance.
ABFA Chief Executive, Jeff Longhurst, said: “There is a significant amount of capacity for even more lending through alternative finance that an increasing number of businesses are recognising as a source of funding.”
He added: “Asset-based lending is now a mainstay of the business finance market, and all businesses will have an asset that they can use to secure finance, including plant, machinery, and even stock.”