16/01/2019
Unsurprisingly, Brexit and its implications feature high on business growth decisions these days. As the argument over how the UK will fare rages on, one thing on which most of us seem to agree is that increased uncertainty will be a fact of life for a while to come.
For some firms, accessing traditional sources of finance such as bank loans is tough at the best of times, when there are even more unknowns, it becomes harder still.
Colonial Equipment Finance provides alternative solutions for businesses to enable them to invest in the assets they need to continue to grow.
While loans, overdrafts and credit lines are still popular financing tools for businesses, alternative sources such as leasing are increasingly coming to the fore.
In contrast to traditional bank lending which may be tied to some form of collateral, and has the risk of being foreclosed - leased assets are a form of collateral in and of themselves and a lease will not be foreclosed while rentals are being paid. This makes leasing accessible to established business but also gives smaller, younger companies with limited track records and credit histories access to capital equipment they would have far less chance of accessing via traditional lending.
But Brexit and the current credit landscape are by no means the only driver of demand for asset finance – or even, for that matter, the most important.
With the pace of technological change as fast as it is, it makes little sense for a business to lock itself into a large capital outlay on an asset that could quickly become obsolete. That’s why we’re seeing a growing number of businesses opting to lease, which enables them to trade up quickly as and when newer and better technology becomes available. In the UK, SMEs for example are now estimated to be financing between 30–35% of new equipment acquisition through leasing.
