Is Now the Time to Invest? The Budget’s Impact on Asset Finance Decisions

Asset finance is often the first area to react after a Budget. Labour wants businesses to invest in productivity-improving equipment and greener technology. The Conservatives argue that encouraging investment while costs remain high could put SMEs at risk. Kemi Badenoch stated that asset finance uptake will remain cautious until businesses know the real economic impact of these Budget decisions.

Lenders are also conflicted. Some are increasing their appetite for machinery and equipment finance, particularly in manufacturing and construction. Others are still applying conservative loan-to-values.

One positive example is a construction firm that secured funding for a new excavator with a competitive repayment structure. The lender was encouraged by the Budget’s focus on infrastructure and planning reform.

A contrasting example comes from a transport company that attempted to finance new vehicles. The lender insisted on a larger deposit and tighter affordability due to concerns about fuel costs and uncertain delivery times.

This is very similar to the environment in 2017 when political uncertainty made lenders cautious despite strong economic growth.

Your decision to invest should therefore be based on realism, not optimism.

If you want independent guidance on when to pursue asset finance, email pa@otiumpartners.com.