Commenting on the publication of the British Business Bank’s Small Business Finance Markets 2019/20 report, which shows that asset finance provided to small businesses grew by 32% between 2014-18, Simon Goldie, Head of Asset Finance at the Finance & Leasing Association, said:
“This excellent review of SME funding shows what has been achieved, but also how much more is needed. Increasing numbers of small businesses are certainly choosing the flexibility of leasing and hire purchase – the FLA’s latest figures, which cover 2019, show that asset finance provided to SMEs was 37% higher than in 2014.
“But it’s frustrating that the very smallest firms, which arguably need the most flexibility in terms of payment holidays or different payment terms, can’t access these benefits as easily as their larger counterparts.
“This is because lending to the very smallest SMEs falls under the Consumer Credit Act, so what should be achievable with through a quick conversation between the lender and customer instead requires a whole new credit agreement to be written. That’s far from ideal.”