With new Paragon research finding that SMEs are set to increase investment over the following months it is vital that they are able to secure the financing the require, writes Ian Galbraith, Paragon's Head of Broker. 

For SMEs throughout the UK the last few years have presented challenge after challenge. Soaring energy prices and supply chain disruptions have required businesses to respond with determination and resilience – and each time they have excelled in doing so.

Presented with an ever-changing economic environment they have made decisions have that helped to support the economy and prepare the conditions necessary for growth – but there are now decisions they need to make to help plan for the future.

Research conducted by Paragon, and published in our new report, An SME Led Recovery, found that over the last year 30% of businesses had held onto machinery longer than they had planned – and 29% had acquired pre-owned assets instead of new. The picture is similar with commercial vehicles, with 35% holding on to them longer than they had planned and 20% purchasing second-hand assets.

With SMEs holding on to assets for longer than they had planned, and acquiring pre-owned assets rather than new, it is clear that there is pent-up demand from businesses looking to update and modernise their operations – and they are looking to financing to make this happen.

Almost half (49%) of SMEs sought financing over the last three months, with 57% of those seeking over £100,000. As dedicated SME lenders, Paragon is ready to work with our partners to ensure that they have access to the financing they need so that they can embrace the technology now coming on to the market.

This summer’s trade shows are set to showcase a host of new energy efficient assets that will provide SMEs with answer to not only the need to update their operations but also reduce their energy bills - and green assets have steadily increased in both availability and efficiency, so has the desire of SMEs to acquire them.

While traditionally fuelled assets continue to dominate the plans of SMEs, our new research also found that those either considering or planning to acquire electric vehicles (EVs) has reached 46% of the sector. Traditionally fuelled assets will continue to lead commercial acquisition for the foreseeable future, but with real growth in the EV market we can expect to see more and more businesses deciding to add their first electric assets to their fleets.

Improved conditions, pent-up demand, plans to invest, and new assets are just what the economy needs to succeed – but all this could go to waste if SMEs are unable to access the financing they need.

The task ahead for brokers and lenders alike is to work closely with SMEs, understand their goals, and provide them with bespoke solutions that allows them to deliver economic growth. Together, we can not only support businesses but also help drive economy forward – and we look forward to working with you to ensure this is achieved.

Visit our website to learn more about how our Asset Finance team works with intermediaries.