By Steve Deutsch, Chief Executive, Wesleyan Bank
In today’s digital age most businesses accept that having the latest technology and equipment is vital to stay ahead of the competition. But, according to research conducted by software provider Exact, the gap between SMEs who believe in changing with the times and those who are actually prepared to keep up is widening.
Exact’s findings reveal that 38% of UK SMEs believe their business may face closure unless they adopt a digital strategy, however only 2% have actually done something about it. This is especially surprising given that almost two thirds (64%) of the SMEs surveyed admitted they face competition from new digital-savvy firms in their market, yet only 6% said they are investing in new technology to keep up.
Speculate to accumulate
Choosing to run a business by depending on outdated equipment and unreliable IT infrastructure is a sure way to get left behind. Doing nothing also brings added cost complications stemming from using inefficient, standalone systems that are possibly no longer supported. From cloud-based services, mobile apps and business analytics solutions, technology is no longer a barrier for SMEs who wish to compete with bigger, more established players.
But deciding how to fund significant investments must be considered carefully – choosing the wrong option could restrict your business’s available working capital when you need it the most.
Benefits of asset finance
Electing to pay for new investments in one lump sum can be cost prohibitive and detrimental to a business’s cash flow. Specialist commercial finance providers, such as Wesleyan Bank, can help. The company, which has doubled its net lending to UK SMEs since 2015, has recently pledged to make an additional £50 million of funding available to businesses who are specifically seeking finance for asset-related purchases. The new ‘Asset Heroes’ initiative will run until 31 December 2017 and UK SMEs from any industry sector are eligible to apply for funding.
Wesleyan Bank’s asset finance commitment follows on from the company’s second annual SME Attitudes to Finance research which surveyed 538 SME owners. The report covers a wide range of topics including levels of optimism pre-Brexit, growth and profitability, planned areas of investment and perceptions around external finance.
The findings reveal that almost a third of firms (30%) who are planning future investments in the next 12 months are most likely to implement new technology to increase efficiency, followed by purchasing specialist equipment (24%).
Flexible asset finance solutions enable SMEs to invest in IT software and hardware, plant machinery, office equipment in addition to building refurbishments and relocations, by spreading the cost over a period typically from one to seven years. This ensures ambitious firms can quickly access the equipment and technologies they need, when they need them, without impacting their cash flow or working capital by paying for new assets upfront.
Embracing the future today
Given the uncertainty surrounding Brexit, it’s only natural for businesses to be cautious about making a financial investment. However, investing in new assets can often be the best way to boost revenues, attract and retain customers and strengthen a firm’s competitive position.
Technology is constantly evolving and SMEs need to be equally as fleet-of-foot in accessing modern systems to maximise efficiency to differentiate their services in a way that their customers now demand. Bespoke asset finance solutions allow businesses to gain rapid access to new equipment and technology to take advantage of emerging market opportunities without being inhibited by large upfront costs.
For further information about Wesleyan Bank’s commercial finance solutions, UK SMEs should contact the company’s Asset Heroes hotline on Tel: 0800 980 9348 or email: [email protected].