Leasing fills gap in manufacturing left by bank lending

According to LDF, £2.41 billion of asset finance was provided to manufacturers last year - £400 million more than five years ago.
 
Bank lending to the manufacturing sector has decreased since the height of the recession, with £23 billion of bank lending to manufacturing businesses outstanding at the end of 2014 compared to £26.8 billion in December 2010, a fall of 14%.
 
LDF says that leasing has become key driver of growth for UK manufacturers of all sizes. The research shows that businesses ranging from FTSE 100 companies to start-ups have increased their use of asset finance since the recession.
 
LDF’s research also shows that alcoholic drinks producers are the biggest single manufacturing subsector for the use of finance leasing, with several large brewers and distillers choosing to procure key equipment through asset finance arrangements. Other subsectors requiring large capital outlays on heavy equipment, such as manufacturing of metals and cars, feature among the biggest users of leasing.
 
Peter Alderson, Managing Director of LDF says:

“Our research suggests that as UK manufacturing starts to build on its post-recession recovery, more and more businesses in the sector are recognising the value of leasing as an important source of finance to help them capitalise on growing demand.”
 
“Since leasing allows manufacturers to invest in machinery and other equipment without making large upfront capital commitments, many are finding it a very appealing way of funding the critical infrastructure, tools and systems they need as business activity picks up.”
 
“After several years of underinvestment as the downturn persisted, many manufacturers are now seeing leasing as an effective way to upgrade to the most up to date systems and equipment without impacting the bottom line and eating significantly into levels of working capital.”
 
“If UK manufacturing is to compete in the global marketplace and help to fuel the economic recovery, investment is key. Manufacturers are now looking to the future, and how leasing can play a part in helping them move forward.”