UK SMEs lack knowledge of alternative lending, particularly asset-based finance, according to a survey by Lloyds TSB Commercial Finance of 2, 000 small businesses.
Just over half of those questioned in the survey (52%) were aware of asset-based lending, compared to 98% who were aware of overdrafts.
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However, only 43% of firms said they understood asset-based lending, while just 19% had ever used it.
Respondents had a better knowledge invoice finance with 70% aware of it, although only 54% said they understood it and only 15% ever used it.
Hire purchase and leasing products fared better in the survey, with 69% of firms saying they have a good understanding of leasing and 36% having used it.
The three most popular reasons for considering alternative forms of finance were corporate acquisitions, boost working capital and investment in property.
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By GlobalDataThe latest third quarter figures from the Asset Based Finance Association (ABFA) showed a 4% increase in the number of businesses using asset-based finance, to 43, 500 firms, compared to the same period last year.
Donald Kerr, managing director of Lloyds TSB Commercial Finance, said: "Access to finance is a key driver of economic recovery, and firms need to be aware of the options available to them, particularly those looking to invest and expand.
