Asset finance is the main source of funding
for UK manufacturers, second only to cash reserves, according to
the Annual Manufacturing Report 2011 (AMR).
Asked to select which methods they had used to
raise capital over the last two years and which they expect to use
over the next two, 37% of UK manufacturers identified asset
The funding model outstripped overdrafts, bank
loans and venture capital investment but was surpassed by the
option to use company reserves which 80% of manufacturing companies
Mark Lee, head of Manufacturing, Transport and
Logistics at Barclays Corporate, said of the findings: “With close
to 40% of companies utilising asset finance as an option, it is
clearly a very popular instrument for raising capital and suits the
“The logistics and cap-ex spend which takes
place in manufacturing is appropriate for asset finance.”
The AMR is compiled by trade magazine The
Manufacturer in conjunction with Barclays Corporate using data from
an online survey of UK manufacturers conducted over August,
September and October.
This year’s report is the first AMR to include
asset finance as a funding option.
The 11th annual report also found
most manufacturers expect a reduction in investment levels compared
to the findings of the previous year’s survey.
Half of those surveyed will invest or have
invested in machine tools this year, down from 60% for 2010, while
investment in communications infrastructure was the only area which
saw a marginal increase in investment.
The majority of respondents expected
investment in machinery to increase next year and major investment
in machinery over the next five years.
The survey also identified cost reduction and
cash-flow increase as the most important focal points of financial
management in the companies surveyed.
A full report and analysis of the Annual
Manufacturing Report will appear in the January issue of