The number of businesses borrowing against their own hard assets is at a record level, according to the Asset Based Finance Association (ABFA).
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div>The number of businesses borrowing against their own hard assets is at a record level, according to the Asset Based Finance Association (ABFA).
ABFA says £4.2bn of alternative business finance is now secured against assets such as real estate and inventories – up 9% from £3.8bn a year ago.
Jeff Longhurst, Chief Executive of the ABFA, said: “Borrowing against hard assets is one of the innovative forms of alternative finance that has really gone mainstream in the last couple of years.
“More and more businesses are starting to see so-called alternative finance as their primary form of funding, rather than just as an unconventional complement to traditional lending.
“For businesses with substantial assets tied up in warehouses, for instance, or in plant and machinery, this can be an excellent way to access lending to drive investment.”
Borrowers are also using more creative ways to obtain funding, using intangible assets such as intellectual property.
Jeff added: “Innovation is also spreading fast in this industry."
“That’s because specialist funders with expertise in valuing these assets are now joining the market in greater numbers.”
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