[London. February 2011] "Capital investment, and in particular asset finance, is the lifeblood that will sustain Britain's recovery. Small and medium-sized businesses (SMEs) are the heartbeat of the British economy and are indispensable to a sustainable recovery and renewed business investment by SMEs is crucial.
"Investment in capital assets stalled during the downturn and is now picking up – this growth must continue for our SMEs to be competitive, and the asset finance industry has an obligation to support this growth.
"The Finance and Leasing Association (FLA), the UK's industry trade association for the consumer, credit, motor finance and asset finance sectors, has reported that more than one thousand small businesses obtain new asset finance every day.
"According to the FLA 750,000 SMEs using equipment on leasing or hire purchase, asset finance represents the majority of debt-financed business investment. With approximately 250,000 new agreements each year, one in every three small businesses with any external borrowing uses asset finance.
"Lombard has been supporting UK SMEs in their capital expenditure for 150 years and intends to continue fulfilling its responsibilities to Britain's entrepreneurs. We remain open and hungry for business in this sector.
"Why asset finance? Because asset finance is vitally important to businesses as leasing, hire purchase and structured debt provide additional, flexible and committed sources of finance. They give more control over cashflow, and preserve working capital. Asset finance can reduce the total cost of using an asset. Lombard can help businesses take away cost, risk and hassle, and give owner-managers the confidence to spend their time focussed on their business, knowing that they have secure funding behind them. It is for this reason that SMEs are coming to Lombard in ever-greater numbers.
"The FLA reported that during 2010 all funding supplied by their members fell by two percent, from £20.1bn to £19.6bn. Against this falling market, Lombard, one of the largest asset finance providers with a twenty percent share in the UK asset finance market, reported that their local business centres' sales channels serving SMEs increased new business by ten percent.
"In 2010 Lombard's business centres provided over £1.2bn of new funding, and Lombard Business Direct, which is responsible for the smaller businesses within the company's client portfolio, increased new finance by 44 percent.
"Increases were reported across a number of Lombard's business centres where funding for vans, primarily used by tradesmen and small businesses, increased by 26 percent, hi-technology and IT equipment by 23 percent, funding for SMEs buying construction equipment increased by six percent, and Lombard's second largest area for funding, production and machinery, increased by six percent.
"During 2010 Lombard created over 20,000 new customer accounts for SMEs, which highlights Lombard's continued commitment to this sector and considering the company is celebrating its 150th anniversary this year also indicates that Hire Purchase is an established and successful product that if applied correctly, can positively support businesses.
"Lombard, as one of the largest asset financiers in the UK with a twenty percent share in the market, remains committed to funding SMEs and we are very much still open for business in this sector."
