UK manufacturers received £2.41bn of asset finance last year, a £10m rise compared to 2013, according to commercial finance group LDF.
LDF’s analysis on the use of finance leases by over 100,000 UK manufacturing businesses from UK regulatory listing Companies House, found that the value of leasing to the manufacturing sector increased by £400m (20%) compared to 2010.
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LDF found that bank lending to manufacturers has decreased 14% between 2010 and 2014, falling from £26.8bn to £23bn.
The research revealed that alcoholic drinks producers were the biggest single manufacturing subsector for the use of finance leasing, with several large brewers and distillers choosing to procure key equipment through asset finance arrangements.
Other subsectors requiring large capital outlays on heavy equipment, such as manufacturing of metals and cars, featured among the biggest users of leasing last year.
Peter Alderson, managing director of LDF says: "Our research suggests that as UK manufacturing starts to build on its post-recession recovery, more and more businesses in the sector are recognising the value of leasing as an important source of finance to help them capitalise on growing demand."
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By GlobalData"Since leasing allows manufacturers to invest in machinery and other equipment without making large upfront capital commitments, many are finding it a very appealing way of funding the critical infrastructure, tools and systems they need as business activity picks up."
"After several years of underinvestment as the downturn persisted, many manufacturers are now seeing leasing as an effective way to upgrade to the most up to date systems and equipment without impacting the bottom line and eating significantly into levels of working capital."
