More Businesses Turning To Asset Finance

Tue, 22 Feb 2011

An increasing number of firms in the UK are shunning bank loans and overdrafts in favour of alternative business finance options, new figures suggest.

Data released this week by the Finance and Leasing Association (FLA) shows that lending to companies to invest in new equipment rose by at least 20 per cent during the final three months of 2010.

This type of lending is known as asset finance and is seen by many companies as an alternative to traditional bank loans and overdrafts for capital investment .

According to the FLA, around a third of all small UK firms with external borrowing use asset finance to acquire business equipment through leasing, renting or hiring.

Julian Rose, head of asset finance at the FLA, said: "Last year asset finance provided almost £20 billion of loans to fund everything from computer equipment to delivery vans."

" Finance for new business equipment remains a viable alternative to traditional bank loans."
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