The latest survey from Asset Advantage found that most commercial finance brokers observed little change in lenders’ readiness to finance soft assets.
Two-thirds (68%) of brokers reported that lender appetite for soft assets, such as software, telecom equipment, office furniture, and soft furnishings, remained stable.
However, two in 10 noted that conditions had worsened.
Brokers explained that soft assets were viewed as less secure compared to hard assets like machinery, vehicles, and heavy equipment due to their lower residual value.
One broker said: “Similar appetite to fund soft assets in the market, in fact it has not seemed to have changed much over the last 10 years.”
More than 20% of brokers indicated that conditions have worsened, with one stating: “Funders are becoming more specific on the assets they will fund and this naturally moves the range of assets away from soft.
“Only a few consider soft assets and their balance sheets have to be robust.”
Asset Advantage, a provider of business finance for SMEs, conducted this survey to better understand the challenges commercial brokers face in securing funding.
The survey aimed to shed light on lender appetite and the current lending landscape.
Philip Knight (pictured), credit and risk director at Asset Advantage, said: “Soft assets can sometimes be challenging for brokers to fund and our latest data shows that it doesn’t seem to be getting any easier.
“It ultimately comes down to the funder’s approach to risk and how willing they are to look beyond equipment valuations and to the credibility of the proposal and the business behind it.
