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 recently released 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

And 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 underinvestment”.

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.

Julian Rose, head of asset finance at the FLA,
said: “This recession has seen the lowest ever levels of

“Britain’s 4.7 million small businesses should
be the engine of recovery. The risk is that, without the tools to
invest, instead of having the latest, high quality equipment the
government will be faced with repairing rusting Britain.”

Claire Hack