How Asset Based Lending is Fuelling Growth
Hilton-Baird Financial Solutions is an independent commercial finance brokerage. Originally specialising in asset based finance, their extended knowledge of the wider commercial finance arena means that they can assist businesses in achieving their goals by identifying the right fit of funding solutions to satisfy their specific requirements. We got in touch with them to find out what it’s like to work in their industry, as well as how asset based lending is continuing to fuel growth.
From our experience, asset based finance has undergone a significant transformation in the UK in recent years. Its flexibility and suitability has enabled it to play a key role in supporting business and therefore boosting the economic recovery.
Furthermore, figures from the Asset Based Finance Association (ABFA) show that advances made to British businesses between April and June 2015 against the value of assets including debtors, stock, property, plant and machinery reached £19.3 billion.
Another prevalent theme is that the decline in bank lending, coupled with the explosion of alternative finance (peer-to-peer lending and crowdfunding reportedly grew by 160 per cent in 2014 alone to provide £1.2 billion of funding), has meant that SMEs and corporates are more willing to consider less traditional forms of funding.
Additionally, the flexibility that asset based finance provides means that it is an ideal tool to support growth plans, particularly in the current climate. Whether a business is struggling to maintain a steady cash flow or requires additional funding to capitalise on expansion opportunities, the features of this form of funding make it an extremely useful solution.
When we introduce cash flow solutions, we find that the needs of the business will drive which funding solutions we will match them with. While we can source a wide range of funding solutions from business loans to trade finance, we often find that asset based finance is the most suitable and versatile option.
We have found that many businesses aren’t utilising the assets on their balance sheet effectively. Releasing the cash tied up in these assets, such as the sales ledger, can provide flexible funds to satisfy a myriad of business goals; releasing cash flow for day to day working capital, to fund new orders and to finance acquisition and merger activity.
Looking further ahead, the biggest opportunities and challenges within our industry are very closely linked. The commercial finance arena is witnessing an era of great change and with change comes both potential risks and rewards. Moreover, awareness and adoption of alternative finance is booming, and is providing much needed support to those businesses who are pushing forward with growth plans at a time when more traditional funding is declining.
This evolving nature of the commercial finance industry requires Hilton-Baird to continually keep abreast of the changing landscape in terms of funder appetites and new entrants in the market place. However, our core ethos remains to support businesses using our extensive knowledge of the commercial finance arena and the suitability of the funding solutions for our clients, both in terms of short and long term needs, understanding that businesses are always evolving themselves.
Company: Hilton-Baird Financial Solutions
Name: Evette Orams
Address: Ashwood House, Ashwood Gardens, Southampton, SO16 7LF
Telephone: 07894 513555