Over two-fifths of business leaders are not aware of asset-based lending

As government support winds down and UK SMEs consider alternative methods of financing for their business, new research from Nucleus Commercial Finance finds that over two-fifths (41%) of business leaders are not aware of asset-based lending (ABL) or how a business can use it to generate finance. Asset-based lending is a form of asset-based finance that uses assets on a business’ balance sheet as security against lending.

According to the research, when asked which assets they had on their balance sheet worth over £250,000, a quarter (25%) of respondents reported having plant and machinery, with a similar amount having property (24%) or stock (22%). Despite demonstrating a strong balance sheet, only 14% considered utilising ABL to finance their business this year.

Chirag Shah, CEO of Nucleus Commercial Finance, comments: “For many businesses, the last 24 months have presented a number of unprecedented challenges, from Covid-19 and supply chain disruptions to staff shortages and inflation.

“As businesses recover from these challenges and government support for SMEs winds down, businesses will need access to funding that is flexible and allows them to scale at pace. Asset-based lending can play a vital role in supporting businesses in their recovery, and provide immediate cash and ongoing financial headroom to support businesses’ goals as they plan for the future.”