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Assessing the role of asset fi nance
Over two-fi fths of business leaders are not aware of asset-based lending
Chirag Shah Chief executive, Nucleus Commercial Finance
As government support winds down and UK SMEs consider alternative methods of fi nancing for their business, our new research fi nds that over two-fi fths (41%) of business leaders are not aware of asset-based lending (ABL) or how a business can use it to generate fi nance. Asset-based lending is a form of asset-based fi nance that uses assets on a business’ balance sheet as security against lending. According to the research, when asked
which assets they had on their balance sheet worth over £250,000, a quarter (25%) of respondents reported having plant and machinery, with a similar amount having property (24%) or stock (22%).
Despite demonstrating a strong balance
According to the research, when asked which assets they had on their balance sheet worth over £250,000, a quarter (25%) of respondents reported having plant and machinery, with a similar amount having property (24%) or stock (22%)
sheet, only 14% considered utilising ABL to fi nance their business this year. For many businesses, the last 24 months
have presented a number of unprecedented challenges, from Covid-19 and supply chain disruptions to staff shortages and infl ation. As businesses recover from these challenges
and government support for SMEs winds down, businesses will need access to funding that is fl exible and allows them to scale at pace. Asset-based lending can play a vital role in supporting businesses in their recovery, and provide immediate cash and ongoing fi nancial headroom to support businesses’ goals as they plan for the future. CCR
In Focus
March 2022
www.CCRMagazine.com
17
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