Asset based lending (ABL) is being hailed as the most underused and underestimated form of business finance by Time Finance, as new data showed only 19% of UK small and medium sized enterprises (SMEs) are using ABL.
The data comes from Time Finance’s recent Finance Apathy survey, commissioned in partnership with Censuswide to uncover the attitudes towards business finance amongst 500 SME owners and decision makers across the UK.
As part of the survey, Time Finance has delved into the extent to which SMEs are familiar with asset based lending.
The data revealed that while 64% of those surveyed knew of ABL, only 19% have used the solution as part of their business’ financial planning, leaving ABL underutilised by over 80% of respondents.
Phil Chesham, managing director of invoice finance at Time Finance, said: “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 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 ABL is less familiar to businesses, but the gap in our survey between those that know of ABL (64%) and those that use it (19%) shows that businesses may not truly understand its potential as a solution.”
Chesham added: “Very often we work with businesses, through our broker partners, who are looking for finance but assume they will be eligible for only one funding solution such as Invoice Finance.
“It is only when we look in closer detail at a business’ finances and assets that we can go further and create a multi-product deal 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.”
