News: Companies delaying urgent investment decisions due to economic uncertainty
A third of UK companies are turning down orders to the tune of more than £5.4 billion rather than investing in new equipment, as revealed in a recent survey by Lombard, the UK's largest asset finance provider.
Research conducted by OnePoll with 600 companies in March 2013 revealed that over 40% of those businesses surveyed that are not investing in capital assets cited their reluctance to invest due to the current economic climate. Despite this, a quarter of the surveyed businesses said they were operating with equipment that needs replacing, and of those nearly three-quarters said this is costing them in terms of higher maintenance bills, with 65% saying it is resulting in lost orders.
The research also showed that of the companies that had increased capital expenditure, over 75% found their profits had increased or stayed the same.
Part of the Royal Bank of Scotland Group, Lombard believes that asset finance, a form of funding that uses the asset as security and helps business release working capital, is a flexible means of funding business investment without taking money out of reserves.
In 2011, Lombard celebrated its 150 years in business since starting out as the North Central Wagon and Finance Company in Rotherham in 1861. It still has around 600 staff in Manvers and specialises in products such as hire purchase, operating lease and sale and leaseback.
Ian Isaac, managing director, Business and Commercial, at Lombard, said: "What is alarming is that the UK lags behind other countries such as Germany, Italy, Switzerland, Turkey and Mexico in relation to investment and purchase of specialised production machinery. The UK needs to invest so that we can get out productivity levels up and work our way up the list of top manufacturing countries.
"We know that we can boost the economy to the tune of billions of pounds and we have the ability to support small- and medium-sized businesses in taking on lucrative deals. This will inevitably help economic growth and help give the UK a global competitive edge. Our international competitors are ahead of the curve in both their investment in manufacturing as well as their greater use of asset finance.
"Lombard has been working closely with sectors such as technology, manufacturing and commercial transportation to raise awareness of asset finance. We have seen a 66% increase in our lending to the manufacturing sector in the past year. But more needs to be done as the research shows low awareness of what this form of funding can offer. As a result we shall increase our efforts to counter the overall low level of confidence that persists in UK businesses, and highlight the flexibility and additional benefits provided by asset finance."
One example is the £1m hire purchase solution for project manufacturing specialist, MTL Group, enabling it to purchase state-of-the-art equipment for its relocation to new premises in Rotherham. The Brinsworth company almost doubled its export sales to £7.3m following the move.
Lombard website
Research conducted by OnePoll with 600 companies in March 2013 revealed that over 40% of those businesses surveyed that are not investing in capital assets cited their reluctance to invest due to the current economic climate. Despite this, a quarter of the surveyed businesses said they were operating with equipment that needs replacing, and of those nearly three-quarters said this is costing them in terms of higher maintenance bills, with 65% saying it is resulting in lost orders.
The research also showed that of the companies that had increased capital expenditure, over 75% found their profits had increased or stayed the same.
Part of the Royal Bank of Scotland Group, Lombard believes that asset finance, a form of funding that uses the asset as security and helps business release working capital, is a flexible means of funding business investment without taking money out of reserves.
In 2011, Lombard celebrated its 150 years in business since starting out as the North Central Wagon and Finance Company in Rotherham in 1861. It still has around 600 staff in Manvers and specialises in products such as hire purchase, operating lease and sale and leaseback.
Ian Isaac, managing director, Business and Commercial, at Lombard, said: "What is alarming is that the UK lags behind other countries such as Germany, Italy, Switzerland, Turkey and Mexico in relation to investment and purchase of specialised production machinery. The UK needs to invest so that we can get out productivity levels up and work our way up the list of top manufacturing countries.
"We know that we can boost the economy to the tune of billions of pounds and we have the ability to support small- and medium-sized businesses in taking on lucrative deals. This will inevitably help economic growth and help give the UK a global competitive edge. Our international competitors are ahead of the curve in both their investment in manufacturing as well as their greater use of asset finance.
"Lombard has been working closely with sectors such as technology, manufacturing and commercial transportation to raise awareness of asset finance. We have seen a 66% increase in our lending to the manufacturing sector in the past year. But more needs to be done as the research shows low awareness of what this form of funding can offer. As a result we shall increase our efforts to counter the overall low level of confidence that persists in UK businesses, and highlight the flexibility and additional benefits provided by asset finance."
One example is the £1m hire purchase solution for project manufacturing specialist, MTL Group, enabling it to purchase state-of-the-art equipment for its relocation to new premises in Rotherham. The Brinsworth company almost doubled its export sales to £7.3m following the move.
Lombard website
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