After a bout of mudslinging between the government and business chiefs, the news of an unexpected 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.
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