Asset based lending on the up, says Weightmans
Manufacturing firms in the West Midlands have moved away from traditional lending arrangements in favour of asset based lending. That’s the view of the Birmingham office of law firm Weightmans.
Barry Doherty, corporate partner at Weightmans, said that from asset based lending such as invoice finance, manufacturing firms are accessing the cash tied up in their inventories to fund working capital growth.
He added that in some cases, the asset based lending approach is helping to fund acquisitions.
Figures released by the Asset Based Finance Association earlier this month revealed that invoice finance lending had grown by 8 per cent. Small and medium sized businesses borrowed £14.9bn from members of the association over the past year.
Doherty said: “With the banks still slow to lend through the more traditional routes, the onus is on companies to go out into market and drum up finance from alternative sources.
“Invoice finance and asset based lending is on the rise and, in my view, will continue to be so throughout 2011; especially amongst manufacturers that have expensive machinery to stand as valid security.”
