Increasing demand by SMEs for new assets is a positive development for the UK economy - and now is the right time for them to secure financing, writes Ian Galbraith, Paragon's Head of Broker. 

SMEs are looking to invest – that is the message we’ve been hearing loud of clear from businesses at the start of 2023.

This is very welcome news. SMEs are the backbone of our economy and if the UK is to achieve its growth potential it will be thanks to the hard work and innovation of thousands of businesses throughout the UK.

Concerns over finance costs saw many firms make the pragmatic decision to delay asset acquisitions and, after previous delays caused by pandemic, the need for fresh investment has only increased.

Assets that businesses wished to replace over recent years are still in operation, with many owners viewing increased maintenance costs as a preferrable option to taking on new investment – but this can only continue for so long and the need to replace them increases with each passing week.

New assets can bring improved efficiency, greater capacity, and an expanded range of services that can be then offered to clients – creating fresh opportunities not only for individual business growth, but also for the national and regional economies.

With growing optimism that the months ahead will see interest rates start to fall, increasing numbers of SMEs are today making the decision to invest in new assets.

This potential was also identified in Paragon research that found businesses are predicting improved cashflow and turnover in 2023, with two-thirds of SMEs seeking financing to invest in their operations and 40% looking to secure over £250,000.

This positive development though comes with a challenge. While global supply chains continue to improve, pent-up demand for new assets means that SMEs may find themselves competing with competitors to purchase the equipment they need at the time they require – and that why it is essential that they start the process sooner rather than later.

Paragon is ready to work with our customers to help them secure the financing they require. As SME specialists, we understand the challenges their businesses face and the need to deliver funding packages that support their ambitions – and we are passionate about providing our partners with the tools necessary to ensuring that they can quickly access the funding they seek.

We look forward to continuing our support for SMEs in the years ahead and, through collaboration with our partners, playing a key role in supporting businesses vital to the UK’s economic success.

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