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April 18, 2019

UK automotive sector missing out on £25bn due to lack of finance

The UK automotive sector is missing out on £25bn due to a lack of finance, according to SME finance provider Wyelands Bank.

By Christopher Marchant

The UK automotive sector is missing out on £25bn due to a lack of finance, according to SME finance provider Wyelands Bank.

The research of UK mid-sized automotive manufacturers, turning over £10m to £300m, showed that nearly all firms (96%) are held back because of a lack of finance. According to Wyelands difficulties raising finance to support their growth have stopped businesses from winning new contracts and that has stifled new job creation.

Each automotive firm said that the difficulties raising finance meant they had missed out on an average of £24.8m in revenues and an average of 24 new contracts.  These would have enabled each firm to create 21 new jobs.

The 1,605 UK businesses surveyed had collectively missed out on 24,284 contracts.  These would have created 11,802 jobs and £25bn in revenues.

The Wyelands Bank research showed that difficulties in raising finance also prevent 82% of automotive firms from investing in new equipment or technology.  Two thirds (63%) have also been held back from entering new markets and half (53%) have been prevented from moving to a new site or premises.

Iain Hunter, chief executive officer of Wyelands Bank, said: “Our research shows that UK mid-sized automotive manufacturers are not able to grow to their full potential without greater access to finance.  But that finance has not been available as traditional banks are too often unable to help.

“Helping mid-sized automotive businesses unlock growth would help tackle the UK economy’s productivity challenges.  Mid-market firms can have a disproportionate effect on growth and job creation, but first they need to be understood as individual businesses.

“It takes time and effort to understand a firm’s specific challenges, and identify how to help them.  This must then be underpinned by a range of flexible financial solutions to help shape the right answer.”

This month Wyelands Bank appointed a relationship manager in its working capital solutions team.

Kevin Sullivan will focus on growing Wyelands Bank’s asset-based lending offering. His appointment is part of the bank’s strategy to help manufacturing and industrial businesses to trade and grow through the right combination of simple financial solutions.

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