The Finance and Leasing Association
(FLA) is calling on the government to “provide incentives to help
[small] businesses invest in new and updated equipment”.

According to recent figures, nearly a
third of smaller businesses are not currently profitable and so do
not qualify for existing tax breaks.

Making leased equipment eligible for
capital allowances would help their potential for recovery, the FLA
has said.

According to research by Oxford
Economics and the Open University Business School commissioned by
the FLA, economic recovery in the UK is “at risk from

The Oxford Economics research showed a
27% fall in business investment among SMEs between 2008 and 2009,
while the Open University’s survey showed almost 20% of small
businesses are struggling to upgrade equipment because of factors
including poor cash flow.

FLA head of asset finance Julian Rose
said: “This recession has seen the lowest ever levels of
investment. Britain’s 4.7m small businesses should be the engine of

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By GlobalData

The risk is, without the tools to
invest, instead of having the latest, high-quality equipment, the
government will be faced with repairing rusting Britain.”