Lloyds Bank Commercial Banking has launched a £500 million growth fund to help British businesses improve productivity through investment in technology and equipment.
The fund aims to support sectors where high-spec machinery and innovations like automation and other technology can help businesses boost productivity and grow in a competitive marketplace.
Firms will be able to use asset finance to get quick access to the funds they need to buy expensive business critical equipment without damaging their working capital.
Asset finance works by allowing firms to buy assets such as machinery or technology and spread the cost over their lifetime. By eliminating the need for large payments up front and instead making smaller payments over a longer period of time, the funding helps free up working capital.
The growth fund will be of particular benefit to SMEs and Mid-Market businesses in the manufacturing, construction, agriculture and transport industries, where the requirement of costly assets, such as machinery and vehicles, is common and boosting productivity is a priority.
Lloyds Bank research that found that inadequate investment was one of the key obstacles preventing businesses from improving productivity, behind skills shortages and onerous regulation.
The report also showed that the primary focus for firms’ investment plans was improving productivity, with respondents from the manufacturing industry specifically highlighting the procurement of new machinery as a key way to achieve this.
Ben Stephenson, managing director SME at Lloyds Bank Global Transaction Banking said: “The pace of technological change is constantly challenging important UK sectors to invest in growth to remain competitive. But businesses need to be able to achieve this without damaging their access to working capital.
“This fund will enable more and more businesses to benefit from the flexibility of asset finance, which can be used to support firms’ needs throughout the economic cycle, whether that’s investing in growth or boosting efficiency.”
Managing director SME at Lloyds Bank Commercial Banking Gareth Oakley added: “The UK’s low level of productivity compared with its G7 peers remains a challenge, and it’s crucial we work closely with businesses to ensure they have the tools they need to make efficiencies and grow. This asset finance fund shows our commitment helping businesses in Britain prosper.”
One business that has used asset finance to increase production is animal feed manufacturer, Dodson & Horrell, which invested £3.5 million in automating its processes to create a single factory and distribution centre and now expects to double the size of its canine business within five years.