Only 2 in 10 businesses using an Asset-Based Lending facility
Asset based lending (ABL) is being hailed as one of the most underused forms of business finance by independent lender Time Finance. New data shows that only 19% of UK SMEs are currently using it.
The data comes from Time Finance’s recent Finance Apathy survey. The research was commissioned in partnership with Censuswide to explore attitudes towards business finance among 500 SME owners and decision makers across the UK.
As part of the survey, Time Finance explored how familiar SMEs are with asset based lending. The finance provider launched the solution in 2022 and has since grown it to facilitate deals of up to £3.5m.
The data revealed that 64% of those surveyed were aware of asset based lending. However, only 19% have used it as part of their financial planning. This leaves the solution underutilised by over 80% of respondents.
Phil Chesham, Managing Director of Invoice Finance at Time Finance, commented: “Asset Based Lending is one of the most versatile and creative finance solutions available to businesses because it allows them to access capital tied up in their existing assets. Used alongside more traditional forms of finance - such as business loans - ABL can be packaged together in one multi-product solution that opens up their funding options and their potential for growth.
“It’s not surprising that asset based lending is less familiar to businesses. However, the gap between awareness (64%) and usage (19%) shows that many may not fully understand its potential.
“We often work with businesses through our broker partners who are looking for finance. Many assume they will only be eligible for a single funding solution such as Invoice Finance. When we examine a business’ finances and assets in more detail, we are often able to go further. This allows us to create a multi-product asset based lending solution that unlocks more capital. We want to continue to work with our broker partners to reach more businesses with our ABL solution; it is a perfect solution for businesses looking to grow.”
Time Finance’s most recent asset based lending deal supported Birmingham-based printing company, Set & Match. The business completed a management buyout funded through a £70k invoice finance facility and a £70k secured loan.
Of the ABL deal, Stuart Mills, Managing Director of Set and Match, said: “ABL is not a funding solution that I had come across, even as a business owner for over 20 years. But it makes absolute sense to me to utilise the assets that already exist in the business. This has created a flexible funding solution. It has allowed me to complete my share purchase and continue to grow the business.”
Learn more about our asset based lending solutions and how multi-product finance can help unlock working capital for your business.