Less than a third of UK SMEs are using finance to procure IT and telecoms equipment and just 1% are using finance for software acquisition, according to a study from research firm Quocirca and BNP Paribas Leasing Solutions.

According to the research into SMEs’ use and understanding of finance and leasing, in particular for IT financing, 76% of small business surveyed financed their business vehicles while just 30% used finance for IT equipment.

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Only 1% of firms surveyed use finance for software with 40% of firms never having considered leasing as option.

The research, conducted in the fourth quarter of 2012, found more than half of SMEs were unaware of the potential benefits of IT finance when compared to cash purchase or bank credit lines. Less than 40% said financing was unnecessary if they had enough cash to buy their IT equipment while 64% of surveyed firms expect their IT budgets to decrease in 2013.

The researchers said their findings showed more work needs to be done to help SMEs understand the benefits of finance for IT.

Other findings in the study include:

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  • 41% of respondents use value added resellers as their main channel for buying IT hardware and software
  • 81% use the internet as either their primary or secondary means of procurement
  • The option to finance a deal is brought up regularly in around 30% of IT purchasing negotiations, while in 15% of conversations it’s never brought up at all
  • Nearly 45% of SMEs raise the option of finance in these discussions themselves
  • Over half of respondents consider up-front costs to be of critical or high concern in their procurement process

Benoît Dilly, UK Country Manager at BNP Paribas Leasing Solutions, said the research showed there is "golden opportunity" for IT resellers to demonstrate the benefits of leasing technology equipment at a time when budgets are reducing.