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BUSINESSNEWS


FLA REPORTS RISE IN ASSET FINANCE LENDING


Asset finance lending increased by 25 per cent to £1.7 billion in May this year compared to the same time last year, according to the latest figures from the Finance & Leasing Association (FLA) last year. According to the FLA, round 1,000 small businesses are taking out equipment finance every day.


“It’s great news that more and more SME businesses are seeing the advantages of asset finance lending,” said Fenestration Finance’s Mark Johnson.


“It’s making it more feasible for them to move


forward with their business plans whether this is expanding their current businesses, purchasing more modern, efficient equipment or simply upgrading the facilities they have.”


However, research by the FLA as part of the Open University’s Quarterly Survey of Small Business in Britain, also shows that tax breaks designed to help small firms invest in new equipment are too complicated and are failing to boost spending.


The survey of 950 businesses asked whether the capital allowances rules were clear enough. Only 8% of SMEs thought they were easy to understand – 19% rated them acceptable, 31% thought they were complicated, and 42% didn’t know or left it to their accountants.


Under the capital allowances system, firms


investing in new equipment pay less tax on their profits. The survey also revealed that for 80% of firms, capital allowances had no impact on their investment decisions, which suggests that the


‘It’s making it more feasible for them to move forward with their


business plans whether this is expanding their current businesses, purchasing more modern, efficient equipment or simply upgrading the facilities they have.’


‘The survey also revealed that for 80% of firms, capital allowances had no impact on their investment decisions, which suggests that the allowance is not acting as an incentive for growth.’


allowance is not acting as an incentive for growth. The risk for the economy is that small businesses do not have the latest equipment, which means they can compete for new business in within the markets.


For many small businesses particularly in the glazing and window industry, the answer is to lease equipment. Leasing companies then claim capital allowances and pass on the benefit through lower rental payments.


Mark Johnson added: “While it’s been a very difficult time for the financial sector we are now seeing month on month growth. The team at Fenestration Finance’s always explain the tax benefits to our clients, that can be considerable amounts but are often over looked. I also feel this proves the UK SME market is defiant and will continue to expand.”


www.fenestrationfinance.co.uk


AMA REPORTS... ‘MUTED GROWTH’ FOR SECTOR


Following several years of strong growth, it is estimated that the UK market for commercial glazing systems increased to around £2.9 billion at installed prices in 2008, but then declined substantially to an estimated £2.2bn by 2010, according to the latest report from AMA Research.


Following the onset of the financial crisis in 2008, construction activity and related commercial glazing work reduced sharply in the office, retail and high rise housing sectors in particular.


In 2009/10, the market was to some extent supported by public sector spending, particularly in the education sector. However, from 2011 the coalition government has severely curtailed spending in this sector, and this will see construction work in the schools sector significantly reduce over the next four years at least.


New orders for office and retail sectors, and in the residential sector, in particular have been low.


BRIGHT SPOTS


Bright spots in this market are to be found in the retail grocery sector and in the development


of budget hotels. In addition, there is, in 2011, still some impetus in the leisure market from building work related to the Olympics.


In terms of product sectors, the largest segment


by value is commercial windows, worth in the region of £1.2bn in 2010. Curtain walling and ground floor treatments are estimated at around £400m and £450m respectively in 2010. The smallest sector is roof glazing, estimated to be worth some £165m in 2010.


As a result of the downturn, the commercial glazing market has seen some restructuring and this is likely to continue over the next three-four years as market conditions remain particularly competitive.


While there is some degree of optimism in 2011 for


the commercial glazing market, a return to the levels of growth seen in the mid-2000s is unlikely in the short-medium term. Prospects are for muted growth in line with a slow and steady improvement in the general economy and construction in particular.


The severe spending cuts made by the Coalition


Government will affect the new build and RMI markets across the public sector. In particular,


82 « Clearview NMS « September/October 2011 « www.clearview-uk.com


‘The largest segment by value is commercial windows, worth in the region of £1.2bn in 2010.’


the schools building programme will reduce significantly with the Building Schools for the Future programme already running down. Other areas of public spending which will see reduced funding for new and RMI construction include health and leisure.


However, there are some areas of optimism in the commercial glazing market and, in particular, the office sector is expected to improve over the medium term – especially in London as 2011 has seen some announcements regarding major schemes in response to a perceived shortage of premium office space by 2014-15. In addition, certain segments within the retail and hotel sectors look set to c


“Commercial Glazing Market Report – UK 2011 – 2015 Analysis” is available in hard copy or electronic format for £665 and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.


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