Despite a year of challenge and change there is cause for optimism looking ahead to 2023, and one positive sign is that the demand for asset finance has remained buoyant, reflecting the determination of UK businesses to keep pushing forwards. During times of economic struggle, having liquidity is important, and asset finance allows businesses to maintain a ‘cash is king’ mentality whilst still investing in their growth.
Why cash is king
In the face of tough times, it is reassuring to see businesses seeking solutions and finding ways to grow and thrive. In an unpredictable landscape, cash flow continues to be king, providing the financial headroom necessary to ride the waves and manage the risks and crucially also facilitating the flexibility to seize opportunities in a timely manner.
In business the status quo is rarely sustainable – businesses are either growing, pivoting, or shrinking. To avoid the latter, keeping one eye on the future is essential, whether that’s investing in new technology, developing new products and services, securing new equipment, or developing the workforce.
While 2023 will not be smooth sailing, there will undoubtedly be opportunities to be seized. The flexibility and creative solutions offered by asset financing could allow businesses to protect their all-important capital while still investing in creating a successful future.
Asset finance is thriving
New business in asset finance will continue to rise with the easing of supply chain shortages and the need to support business investment, even with interest rates continuing to present a challenge.
The indications are that a move towards sustainability driven by the Government’s 2050 Net Zero targets is fuelling a demand for asset financing for greener equipment in particular, while in turn lenders will be looking more than ever to fund businesses that can demonstrate robust environmental, social and governance credentials.
Alongside value, which is always key, customer-focus, transparency and offering a straightforward journey will all continue to be crucial differentiators for those seeking brokers and lenders over the coming 12 months.
We know our network of brokers expect timely decisions and pay-outs, accessible support, and good relationship management and communication for the life of the finance deal, enabling them in turn to provide a better service to their customers.
SMEs
While the challenges of 2022, from inflation and high energy costs to workforce shortages and supply chain disruptions, are not likely to evaporate, SMEs in particular appear to be sustaining confidence.
The FLA flagged a rise in new lending to SMEs, with Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, commenting on new lending to SMEs ‘increasing at a double-digit rate.’
She added: “Demand for finance to support business-critical investment combined with the gradual easing of supply shortages should support asset finance new business volumes over the next twelve months.”
That SMEs continue to invest and grow is essential for the whole UK economy, given that they are widely credited with accounting for three-fifths of employment and around half of turnover in the UK private sector.
It’s key they can access the right finance options. Rather than only looking to the high street banking sector with its at times blunt-tool approach to lending criteria, they could find the more bespoke finance solutions they need through lenders such as us, or expert finance brokers who are well-placed to guide and advise. There is also the potential to refinance valuable assets and release all important cash funds.
Get in touch to find out how we might help 2023 be the year you hope it will be on: info@dgfinance.co.uk or by calling 01425 474070.