Businesses the world over have seen challenging times over the past two years, with issues arising from a global pandemic, staff shortages, rising energy prices, a haulage crisis and the reshaping of trading agreements disrupting even the safest of industries and leading to uncertainties and the undermining of business confidence.
Throughout it all, Ultimate Finance has remained committed to supporting UK businesses with access to tailored funding through a range of solutions: Working Capital Finance, Asset Finance, Bridging Finance and Structured Finance. Today, we catch up with our Head of Operations Simon Gregory and Head of Sales Richard Hamilton as we look at how Asset Finance solutions have continued to help keep businesses moving.
According to the latest FLA’s Industry Trend report, total new Asset Finance business in the UK grew by 14% in 2021 compared to 2020 at over £31 billion. Whilst a great achievement, it is important to put it in context and point out that this still 12% less than the £35 billion+ witnessed pre-pandemic in 2019.
Head of Operations Simon Gregory explains, “Ultimate Finance also achieved some impressive results with our Asset Finance proposition since 2019, when we finished with record new business funding of over £37m. Although 2020 was exceptionally challenging, we saw an upturn in Asset Finance facilities as demand grew at the end of the year, and we came within just £1m of our 2019 record.”
Head of Sales Richard Hamilton continues, “There were a few reasons for the continued growth of our proposition: businesses were using unencumbered assets as a way to inject cash back into their business, existing clients found refinancing a great route to unlock some incremental capital and we supported further through acting quickly to provide CBILS backed Asset Finance to businesses facing tougher times”.
2021 saw another challenging year for businesses, and our Asset Finance proposition grew by 27% year on year, with a new record of over £46m new business written. Gregory adds, “At the end of 2021, our Asset Finance performance was above the industry trend of 14% growth, and we achieved an impressive 24% growth when comparing (pre-pandemic) 2019 and 2021”.
Looking ahead at 2022 and beyond, there remain many challenges for businesses. Already the FLA reports that Q4 2021 was down against Q4 2020, perhaps a reflection of some uncertainty with supply delays, inflation concerns, looming interest rates and tax rises impacting businesses already. But it is not all doom and gloom. Gregory explains, “January 2022’s FLA data showed business was up 11% on 2021 – although it is important to note we were in the midst of a third lockdown then – with the three main hard asset areas of plant and machinery, commercial vehicles and cars remaining strong, and we expect the super-deduction allowance will help make a difference too”.
Hamilton continues, “Access to the right support will remain key to success and growth for businesses. We have, and will continue to, adapt to provide the best service. Our recent development of our Asset Finance loan book, which has gone from £46m pre-pandemic to currently over £75m is a source of pride and testament to our unwavering commitment to our Introducers and their clients”.
“Our aim is very much to continue to support businesses in the most efficient and high-quality manner as possible, and so far in 2022, we’ve seen no downturn. We have put in place additional wholesale funding secured through HSBC, been back on the road meeting Introducers at regional and local events and growing our Sales team with the recent appointment of a new Regional Director for Scotland.”
Gregory concludes, “As the funding partner of choice, we believe that together with industry brokers, we hold the expertise and the right approach to help keep businesses moving. We will continue to focus on our relationship-driven model with both our introducers and their clients to ensure we keep supporting their ambitions with the right funding and the right support”.