AT Business Associates

Asset finance helping support UK manufacturing investment

JohnnyMorgan — Thu, 17 May 2012 11:00:14 +0000

After a bout of mudslinging between the government and business chiefs, the news of an expected rise in employment has helped cool tempers. At the same time, new figures have underlined the role that asset finance is playing in supporting SME investment growth.
The fall in unemployment to 2.63 million for the first three months of 2012 helped to quickly put a more positive spin on business conditions in the UK after comments by William Hague and Philip Hammond sparked a row with business leaders. Nevertheless, the government has been faced with another call to boost enterprise.
Although the coalition can point to another new £10 million scheme designed to generate growth in the private sector, this time focusing on loans to allow under-25s to set up their own companies, stimulating business growth and, in particular, SME finance, remains a headline issue. However, recently published data by the Finance & Leasing Association highlights the growing role of the alternative small business finance sector in driving industry growth.
The new figures show how asset finance is helping to fuel investment in manufacturing: asset finance for investment in plant and machinery grew by 26% in Q1 2012 compared with the same period in 2011, according to the association. Asset finance for cars, commercial vehicles and IT equipment also grew over the three-month period.
This trend underlines the growing role not only of asset finance but of the alternative SME credit sector in general, which also includes small business lending facilities such as invoice discounting and factoring. This sector has grown steadily in recent years to fill the void left by mainstream lenders.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

Invoice finance the answer to rise in corporate insolvency?

JohnnyMorgan — Tue, 08 May 2012 09:30:16 +0000

New data from the Insolvency Service has shown an increase in corporate insolvency, a trend that underlines the current challenging conditions for small businesses, but also puts a spotlight on SME finance and the role of alternative SME credit services, such as invoice finance.
Late payment from customers was highlighted by the Insolvency Service as a leading reason behind corporate insolvency, with the annual survey finding that businesses had to wait an average of 17 days beyond agreed payment deadlines for their invoices to be paid over the period. Late payment is nothing new to the SME sector – reports at the end of last year showed that small and medium-sized businesses were owed over £33 billion.
So, what’s the answer to the problem of late payments? Alternative SME finance, including the likes of invoice discounting and factoring, is one. This sector has steadily grown in popularity, enabling SMEs to generate capital and maintain cash flow at critical times, such as when they’re affected by late payments.
As mainstream banks have become more cautious about small business lending and have made overdraft and loan terms stricter, alternative SME credit facilities like invoice finance and asset finance have stepped in to fill the gap. These services are allowing healthy SMEs to remain that way: invoice discounting and factoring encourages clients to pay on time, protecting against the threat of insolvency.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Bank SME lending cautious but invoice finance is filling the void

JohnnyMorgan — Thu, 03 May 2012 09:30:43 +0000

A new survey this week predicts a marked decrease in bank lending to businesses in 2012, but the figures arguably only tell half the story. Alternative SME lending services such as invoice finance have emerged as mainstream finance products, meeting demand that many banks have not wanted to.
A survey from Ernst & Young Item Club has forecast an almost 7% drop in bank lending to £419 billion in 2012, with write-offs on business loans increasing by nearly 2%. While these figures paint a somewhat negative picture, there is reason to be more positive. The reasons behind the decrease in SME lending from the big banks are well documented (and equally well contested) but, at the same time, the alternative small business lending sector has grown steadily.
Healthy small businesses are increasingly looking to invoice finance, asset finance and other forms of alternative SME finance to maintain cash flow in the face of big bank reluctance, whether in the form of higher lending rates, unfavourable terms or a refusal to lend. As alternative SME credit facilities become increasingly established, they are finding a regular spot among the mainstream lending product range: businesses aren’t giving up on bank SME lending altogether, they are combining it the likes of invoice discounting and factoring services that come with better terms and greater flexibility.
Interestingly, the Ernst & Young Item Club research attacks the government’s efforts to bolster SME lending, including the national loan guarantee scheme. While this is an increasingly popular sport, there is perhaps room to suggest that the time has come for small businesses to stop looking solely to the government and the major banks for SME lending services. An alternative small business credit industry has emerged to help an increasing number of businesses and the time has come for more businesses to take advantage of these financial products.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

SME dissatisfaction underlines role of invoice finance

JohnnyMorgan — Thu, 26 Apr 2012 09:30:09 +0000

In recent weeks, much has been made of efforts to improve bank SME lending, however, new information from the Bank of England and the Financial Ombudsman Service (FOS) has provided a reminder of why improvements are required and why the likes of invoice finance and asset finance have gained so much in popularity.
The government has laid its cards on the table in terms of SME finance over the last month or so, with a small business-focused 2012 Budget and the introduction of the National Loan Guarantee Scheme, and the reception has generally been positive, but new information from the Bank of England and the FOS is a no-nonsense reminder of why these measures were required in the first place and why, perhaps, they haven’t gone far enough.
The information from the Bank of England has underlined the continuing dissatisfaction some small businesses are experiencing with bank SME lending policy. The report pinpoints an increase in the cost of renewing existing credit facilities, rising arrangement fees and more stringent collateral requirements on new lending. It also highlighted ongoing late payment problems.
At the same time, the FOS has released information showing a 10% rise in complaints regarding loans and overdrafts to small businesses over the last year. According to the information, banks refusal to renew loan or overdraft facilities, or offering to do so only at a hugely increased rate, has been a key issue.
This new information is a reminder that SME credit remains an ongoing challenge and also underlines why alternative small business finance facilities such as invoice discounting, factoring and asset finance have grown so much in popularity and have become established as mainstream SME finance services for healthy small businesses.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Rise of alternative SME finance easing pressure on banks?

JohnnyMorgan — Thu, 19 Apr 2012 15:00:30 +0000

While the increase in the UK trade deficit and a focus on SME export sector performance has once again raised questions about the availability of small business finance, there is a sense that the banks are coming in for less flak thanks to the continued growth of the alternative SME lending industry.
The increase in the UK trade deficit in goods and services for February to £3.4 billion has put the spotlight back on the country’s export sector and, in particular, SMEs operating in that realm and the level of small business finance that they can access. The British Chambers of Commerce has responded by calling on the government to increase its investment in business, including by giving SMEs more support in key areas such as SME finance.
“Better access to SME finance” is a call that has been heard regularly in recent years, and one that has been aimed, whether directly or indirectly, at mainstream lenders. However, in recent weeks, it is arguably the case that there has been some easing of pressure on this group, with a number of business organisations, to differing degrees, showing some sympathy to banks. What is causing this softening? Well, the growth of the alternative SME finance sector, offering products such as invoice discounting and asset finance, has certainly played a role.
New data from the Finance and Leasing Association show that demand for asset finance among SMEs is continuing to grow, a trend it interprets as demonstrating growing confidence among the small business community with regard to investment. According to the association, February was another strong month, with businesses turning to asset finance to fund investment in new and replacement business equipment. Plant and machinery, IT equipment and commercial vehicles finance were the most popular formats.
How should we interpret any easing of pressure on banks regarding SME finance? This sector still needs to improve its small business lending and this may be easier to achieve as the alternative SME finance sector continues to play such a central role.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

SME bank talk underlines alternative SME finance growth

JohnnyMorgan — Thu, 12 Apr 2012 14:00:20 +0000

As the dust settles following a strongly business-focused 2012 Budget, attention has once again fallen on the role of alternative SME lending services, including asset leasing and invoice finance. Interestingly, the prospect of an SME bank is back in the headlines.
The possibility of an SME bank has been raised on a number of occasions over the last six months as a means of improving small business credit, but until recently, it has existed on the periphery of the debate. However, the idea has gained more traction since the 2012 Budget, arguably a reflection of the light shined on the state of SME finance and the realisation that, despite the government’s efforts, the mainstream small business lending sector won’t be providing all the answers.
The recent Budget and introduction of the National Loan Guarantee Scheme and the discussion around these measures and their viability has focused minds not only on the role of high-street banks in terms of SME lending but, crucially, the increasing role being played by the non-bank lending sector, which includes small business credit services such as invoice discounting, factoring and asset finance.
Interestingly, more attention is being paid to the role an SME bank could play, a suggestion that is drawing more and more comment. Instead of being left on the sidelines, this topic is receiving broader coverage. The Federation of Small Businesses has recently pointed out that five dominant lenders account for 90% of lending to SMEs in the UK, while in the US, there are 15,000 finance institutions competing to lend to companies. The association has also contrasted the make-up of the banking system in the UK to the more competitive structure of those in Germany and Japan.
Will an SME bank work in the UK? That’s a tough call, but what is more important is that the growing debate around this topic signals an important shift in the psyche of the country, in that the alternative SME lending sector is no longer merely an ancillary industry but an increasingly central one.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Business confidence improving but SMEs need invoice finance

JohnnyMorgan — Wed, 04 Apr 2012 09:30:32 +0000

Good news from the British Chambers of Commerce: business confidence is improving and the economy has grown in the first quarter. However, it believes that SMEs need more backing to maintain this momentum, a forecast which puts the spotlight on SME credit services such as invoice finance.
In its Q1 2012 Quarterly Economic Survey, the BCC has reported that business confidence is improving, with companies, including SMEs, expecting turnover and profit growth in 2012. It has also stated its belief that the UK economy grew in the first quarter of the year. If such expansion is confirmed, it will mean that the country has avoided slipping back into recession.
However, at the same time, the BCC has emphasised that SMEs need a great deal more help if this tentative upturn in confidence and economic growth is to lead to a stronger recovery in conditions. It has called on the government to take radical steps to achieve this goal, including ramping up its credit easing scheme, scrapping the rise in business taxes and introducing a SME bank dedicated to improving small business lending.
The statement from the BCC gives growing credence to the growing belief that, while the 2012 Budget included measures designed to help SMEs and the National Loan Guarantee Scheme is a positive development, the government has not gone far enough to improve small business credit facilities in the UK.
According to the BCC, cash flow remains a real problem, which underlines the growing role of alternative small business lending facilities such as invoice discounting, factoring and asset finance. It seems clear that alternative SME credit facilities will play an increasingly prominent role alongside high-street lenders, and the BCC’s comments go some way to confirming this sector’s importance.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Has the 2012 Budget delivered in terms of SME finance?

JohnnyMorgan — Fri, 23 Mar 2012 09:30:43 +0000

The National Loan Guarantee Scheme (NLGS) has been formally unveiled and a series of SME finance measures have been announced, but the 2012 Budget for business has still attracted some criticism, with alternative sources of SME credit, such as invoice finance, remaining a pertinent topic.
The NGLS, designed to improve SME lending, is finally with us, introduced alongside measures such as a reduction in corporation tax, the simplification of tax for SMEs and research and development tax credit in the 2012 Budget.
The Budget certainly included a strong focus on business, but in the wake of Wednesday’s news, there have been questions and comments that underline the limitations of mainstream small business lending and the growing role that alternative SME finance products, such as invoice discounting and factoring, will play going forward.
Notably, a number of banks have opted out of the NLGS, the largest being high-street major HSBC, while concern has been raised over a £25,000 lending floor as part of the credit easing programme. In addition, the British Chambers of Commerce (BCC) has criticised the government for not doing enough for the companies at the smaller end of the SME scale.
So, has the 2012 Budget delivered in terms of SME finance? Has the government put a plan in place to get small business lending flowing again? Only time will tell and perhaps we’re missing the point by expecting a fix-all SME finance solution from the Coalition.
Maybe mainstream banks shouldn’t be expected to cover all SME finance needs any more – SME lending will hopefully improve from these banks, but alongside a greater role for alternative SME lending facilities, such as invoice finance and asset finance, which will continue expanding to meet the small business credit needs that high-street lenders struggle to provide.
The government has been increasingly vocal about the growing role of alternative SME lending facilities, which is an industry that the BCC continues to support: tellingly, commenting in the wake of Budget, it urged the government to look at innovative ways of providing credit to viable firms.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Invoice finance popularity grows again as 2012 Budget looms

JohnnyMorgan — Fri, 16 Mar 2012 14:00:04 +0000

As the country gears up for the 2012 Budget and awaits details of the Chancellor’s national loan guarantee scheme, calls for improved SME finance are growing louder, while the invoice finance market continues to grow.

With only a few days until the Chancellor gets his red briefcase out, the British Chambers of Commerce have called on the government to deliver a Budget for business. The organisation has proposed a range of measures to support business growth, including the scrapping of the planned business rate rise, the introduction of a capital allowance scheme for medium-sized companies and a scheme to motivate employers to take on more young people.

The British Chambers of Commerce has also reiterated its support for an SME bank, an effective small business credit easing programme and widespread deregulation regarding SME operating practices.

It is clear that this year’s Budget will be a very important one for small businesses and one from which these companies expect a lot, in particular in terms of improving SME lending facilities. However, while all eyes will be on the government, there is evidence that SMEs are increasingly taking the initiative when it comes to securing finance.

New figures from the Asset Based Finance Association show that use of invoice finance by small businesses in the UK and Ireland continues to grow. The use of invoice finance products such as invoice discounting and factoring grew by 7% in 2011 according to the association, against a 3.7% decline in net lending to firms. Tellingly, a key factor behind the continued growth is the ongoing struggle by SMEs to access bank finance.

To what degree the Chancellor delivers a Budget for business next week remains to be seen, but what is more clear is that the role of alternative SME lending facilities, such as invoice finance, is growing increasingly important.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.