Only 2 in 10 SMEs using finance solutions, shows new data from Time Finance

Asset Based Lending (ABL) is being hailed as the most underused and underestimated form of business finance by independent lender, Time Finance, after new data shows only 19% of UK SMEs are using ABL.

The data comes from Time Finance’s recent Finance Apathy survey, commissioned in partnership with Censuswide to uncover the attitudes towards business finance amongst 500 SME owners and decision makers across the UK.

As part of the survey, Time Finance has delved into the extent to which SMEs are familiar with asset based lending, which the finance provider launched in 2022 and has since grown to facilitate deals up to £3.5m.

The data revealed that while 64% of those surveyed knew of ABL, only 19% have used the solution as part of their business’ financial planning, leaving ABL underutilised by over 80% of respondents.

Phil Chesham, managing director of invoice finance at Time Finance, commented: “Asset based lending is one of the most versatile and creative finance solutions available to businesses because it allows them to access capital tied up in their existing assets. Used alongside more traditional forms of finance – such as loans – ABL can be packaged together in one multi-product solution that opens up their funding options and their potential for growth.

“It’s not surprising that ABL is less familiar to businesses, but the gap in our survey between those that know of ABL (64%) and those that use it (19%) shows that businesses may not truly understand its potential as a solution.

“Very often we work with businesses, through our broker partners, who are looking for finance but assume they will be eligible for only one funding solution such as Invoice Finance. It is only when we look in closer detail at a business’ finances and assets that we can go further and create a multi-product deal that unlocks more capital. We want to continue to work with our broker partners to reach more businesses with our ABL solution; it is a perfect solution for businesses looking to grow.”

Of the ABL deal, Stuart Mills, managing director of Set and Match, said: “ABL is not a funding solution that I had come across, even as a business owner for over 20 years. But it makes absolute sense to me to utilise the assets that already exist in the business. It has created a funding solution which is flexible, and it allows me to complete my share purchase and continue to fund and grow my company.”