UK firms are investing more in IT and technology than any other business area as they seek to drive efficiency, increase profitability, become more competitive and invest in the future.
Buoyed by a growing confidence in the economy, UK firms have invested a total of £1.9bn in IT equipment in the last 12 months, a 35% increase over the previous year, according to a survey of members of the Finance and Leasing Association.
IT equipment finance amounted to £162m in July alone, a 37% increase over the same month last year, as businesses generally looked to replace aging systems and plan ahead for the future.
This compared with sectors such as commercial vehicle and business equipment finance, which grew by just 12% and 3% respectively in the same month.
And while IT equipment finance grew by 35% during the 12 months to the end of July, commercial vehicle and business equipment finance were up by only 9% and 7% in the same period.
UK business survey results
At the same time, a new survey of UK businesses which have invested in assets in the last year, showed that nearly seven in 10 (69%) have invested in IT and technology during that time.
The study showed that over two-thirds of respondents thought their business could benefit from investment in technology and believed that improved technology would increase efficiency and help them become more competitive.
Some 78% of survey respondents also called on the UK government to do more to support them by encouraging ongoing investment in new technology.
When looking at reasons for the rising levels of investment, some 80% of businesses listed a desire for efficiency as a reason for investing. Other notable factors were a wish to increase turnover and profit (84%) and to keep up with the competition (83%).
Half of businesses also said they were investing to secure future growth, with a further 27% investing to replace ageing equipment. Only 10% said they were not investing and had no plans to do so in the future.
The research also revealed that business confidence in the UK economy was growing, with 67% of businesses surveyed saying they were more confident than they were 12 months ago.
Businesses were feeling more confident about the broad economic outlook and their own markets and, as a consequence, were more confident in investing in their future growth.
That meant that decisions to replace assets were now being taken, rather than being deferred until better times, because the perception was that the ideal time to invest had now arrived.
What is the best means of investing?
Businesses wishing to invest in new assets can do so in a variety of ways, and increasing numbers of firms are turning to asset finance as a means to acquire the technology they need.
Investment decisions of this nature often start with an independent finance provider and, for many companies, High Street banks are not necessarily their first port of call. This may be for a number of reasons, but many businesses are increasingly seeking independent means of finance.
Independent finance providers can offer a credible alternative to the banks for many business finance needs, and can provide a long pedigree in the asset finance arena over many years’ experience.
Independent finance providers, like Maxxia, are expert at providing the appropriate funding for a whole series of asset classes, including IT equipment, new vehicles, plant and machinery, agricultural machinery – and many more.
Asset financing typically covers a variety of lending and payments solutions commonly tied to the assets involved, so it’s important to discuss the solution that best suits your own needs before making the final investment decision.
What’s the best solution?
Asset finance will usually involve leasing or lease-like structures, such as hire purchase, operating or finance leases, or sale-and-lease back arrangements. Your finance provider should be able to draw on their experience and expertise to discuss with you the most suitable finance arrangement to meet your needs.
They should also ideally provide a consultative approach which quickly identifies the key needs of your business.
These may be to optimise your cash flow, take advantage of short term financial gains or a desire to spread your repayments over the longest possible repayment period.
Once these objectives have been clearly identified, your finance provider should work with you to offer the type of asset finance that will help your business achieve what it wants to do.
Choosing the right provider should give you fast access to asset finance on a huge array of equipment across a wide array of sectors.
And having that degree of experience and flexibility working for you is truly an asset in its own right, and can help you make the right investment decisions for your business.
If you would like to find out more about the finance options available at Maxxia, then please get in touch.