Over a 3rd of SMEs have actually extended possession life due to provide chain restrictions

Published on 24 Nov 2023 by The Manufacturer

Over a 3rd of SMEs have actually run an equipment possession for longer than prepared due to provide chain problems affecting the accessibility of brand-new versions, Paragon Bank research study has actually exposed.

The study of over 500 SMEs by Opinium revealed that 36% of companies are running an equipment possession for longer than prepared, with a quarter (26%) running industrial cars for longer than prepared for.

Simply under a 3rd (31%) have actually re-financed an existing equipment possession, with 38% obtaining used properties due to the absence of accessibility of a brand-new choice.

Makers were most likely to utilize a current possession for longer than prepared, with 41% of companies experiencing this. Running possessions for longer than expected was likewise typical in the transportation and logistics (36%), farming (34%) and building (31%) sectors.

The research study revealed that companies are now seeking to resolve the concern through brand-new financial investment– 4 in 10 companies (39%) are preparing to get brand-new equipment properties in the next 6 months, with a more 36% thinking about investing.

Over a 3rd (35%) are preparing to buy other devices, with 28% looking for to obtain brand-new HGVs and 20% LCVs.

4 in 10 (41%) of those companies preparing to purchase brand-new equipment properties expect costs in between ₤ 200,000 and ₤ 500,000, with a 5th (18%) of companies preparing to invest in between ₤ 100,000 and ₤ 200,000. A comparable percentage strategies to invest in between ₤ 50,000 and ₤ 100,000.

SME Lending Sales Director, Stewart Good stated: “Although alleviating, the consequences of the pandemic are still being felt and supply chains are still not running at optimal levels. This makes it more difficult for SMEs to get the possessions they require to grow their services and we have actually seen more companies turning to running plant and equipment longer than initially prepared.

“As supply chains are normalising, we’re now seeing more powerful need from clients to begin changing these properties. Similarly, organizations are launching money from these possessions by refinancing.”

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