The constant cloud of uncertainty that has immersed the UK since we voted to leave the EU has arguably had a negative impact on how some businesses are approaching investment. In the manufacturing industry, attitudes are becoming increasingly optimistic although remaining cautious about what Brexit will deliver. While many are still hopeful for a positive outcome and a stronger Britain, there are still legitimate fears that naturally come with the unknown.
Although a positive picture is starting to emerge for manufacturers with the UK currently being the world’s eighth largest industrial nation (source: themanufacturer.com) – some businesses are looking to the future while tentatively taking one step forward and two steps back when it comes to investment.
Technological advancements, a skilled workforce and the acquisition of quality equipment will fuel growth and innovation for most businesses. Economic modernisation, following the de-industrialisation of British manufacturing and the subsequent decline of production in the 1970s, opened up our markets to international trade, but business owners remained using inadequate, outdated facilities and assets due to companies reducing capital expenditures for far too long.
In the 1970’s, Keith Joseph of the Conservative party’s stated “Growth Means Change” and that the industry was “overmanned” with “too low earnings and too little profit and too little investment”. Although this movement led to an industrial decline and the reduction of factory workers, time has given a new perspective to help us prevent history from repeating itself.
With 67% of manufacturers believing they could access finance easily and 75% finding that apprenticeships are finally gaining respect as an alternative to university (source: themanufacturer.com) – Investment in machinery and skilled workers will undoubtedly help to catapult British manufacturing back onto the world stage once more.
Continuing to move forward in uncertain environments requires innovative ideas, manpower and first-class equipment. Focus more on your business needs to determine how you use your equipment. You might need multi-million-pound equipment to service a project for a new customer – leasing options can diminish the issues and costs of owning that equipment outright.
You might need to shift your under-utilised assets, into short-term rental to generate capital and improve cash flow while investing long-term in other assets to replace overpriced rental agreements. You might need to start a facility upgrade that will take 18 months without suffering the cash drain of the long build and install cycle.
Once your unique needs are defined, you should find yourself a specialist finance partner that understands your specific business needs. Most banks or equipment finance companies will not have the depth of experience with your assets, end of term flexibility or short-term needs.
It is natural for traditional lenders to pull back in times of uncertainty, but some specialist equipment-driven lenders can move beyond these issues and competitively handle your short and long-term needs with maximum flexibility, preserving cash and enhancing cash flow during even the most severe uncertainty.
For over 30 years, Somerset Capital Group has been providing customised, equipment finance solutions globally. We have helped some of the UK’s leading businesses by developing flexible leasing options.