New research from bank Cambridge & Counties Bank reveals that just one in 10 (11%) business owners describe the strength of their firm’s working capital facilities as ‘very strong’ even though the business is doing well. Nearly half (45%) described it as ‘average’ while 12% said it was ‘weak’.

Despite these findings, just 29% of respondents said their firm had used asset finance to better manage cash flow and not to tie up vital working capital. Fewer (26%) said they were planning on using asset finance over the next 12 months. The survey found that, of those businesses that had used asset finance over the past five years, the primary reason (cited by 20%) was to purchase new plant or equipment while protecting their cash flows.

Other key reasons included that because the firm had been unable to extend its overdraft facilities (15%), asset finance enabled the business to raise funds and allowed the firm to release much-needed capital against unencumbered assets (13%).

One in 10 (10%) said they had been turned down for a formal loan from their bank or building society. The research reveals that just one in 10 (11%) business owners describe the strength of their firm’s working capital facilities as ‘very strong’ even though the business is doing well. 29% say it is ‘quite strong’, nearly half (45%) described it as ‘average’ while 12% said it was ‘weak’.

Despite these findings, just 29% of respondents said their firm had used asset finance to better manage cash flow and not to tie up vital working capital. Fewer (26%) said they were planning on using asset finance over the next 12 months.

Simon Hilyer, Business Development Manager Cambridge & Counties Bank said: “We believe that too many UK businesses are not realising the significant benefits that asset finance can bring them. Many may not be aware of asset finance and the options and types of products that are available to them.

“Cambridge & Counties Bank provides a dedicated and comprehensive range of asset finance products and we would urge UK businesses to see how facilities such as Hire Purchase and Finance Leasing can help them maximise capital, investment efficiency and minimise challenges around cash flow.”