UK SMEs lack knowledge of alternative lending, particularly asset-based finance, according to a survey by Lloyds TSB Commercial Finance of 2, 000 small businesses.

Just over half of those questioned in the survey (52%) were aware of asset-based lending, compared to 98% who were aware of overdrafts.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

However, only 43% of firms said they understood asset-based lending, while just 19% had ever used it.

Respondents had a better knowledge invoice finance with 70% aware of it, although only 54% said they understood it and only 15% ever used it.

Hire purchase and leasing products fared better in the survey, with 69% of firms saying they have a good understanding of leasing and 36% having used it.

The three most popular reasons for considering alternative forms of finance were corporate acquisitions, boost working capital and investment in property.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The latest third quarter figures from the Asset Based Finance Association (ABFA) showed a 4% increase in the number of businesses using asset-based finance, to 43, 500 firms, compared to the same period last year.

Donald Kerr, managing director of Lloyds TSB Commercial Finance, said: "Access to finance is a key driver of economic recovery, and firms need to be aware of the options available to them, particularly those looking to invest and expand.