The funding gap for small businesses is being given a boost by asset-based lenders, as more firms turn to alternative finance following Brexit uncertainty and the launch of the government’s bank referral scheme.
A 22 per cent rise in asset backed lending over the past year has been recorded, taking the amount of finance made available through this channel to £4.3 billion. The figures, published by the Asset Based Finance Association (ABFA), show an all-time high that’s being partly attributed to the government bank referral scheme for businesses struggling to access finance. The scheme requires nine of the UK’s biggest banks to pass on the details of businesses who they are not able to support onto three platforms where ’alternative’ sources of finance can be offered, including asset-based finance.
Jeff Longhurst, Chief Executive of the ABFA, comments: “Businesses continue to suffer from a lack of finance, asset based finance offers a real solution.”
“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. 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.”
“With the introduction of the new Bank Referral Scheme, an even larger number of businesses will recognise the options open to them and will be able to secure finance through asset based lending and invoice finance.”
Amount of available lending against machinery and property reaches record high £4.3bn – up 71% in last five years
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