An overwhelming 45% of businesses said they hope to secure lower costs as part of the benchmarking process, according to the latest SME Trends Index conducted by commercial finance broker Hilton-Baird Financial Solutions.
This is significantly more than the 28 per cent who review their facilities with the aim of securing additional funding, with 25 per cent looking for greater flexibility.
Encouragingly, given the evolving commercial finance landscape, 63 per cent of the business owners and finance directors questioned in the survey had reviewed their existing finance arrangements within the past six months. Of concern, however, is that almost one in five admitted to not reviewing them inside the past year.
Following recent figures from the National Association of Commercial Finance Brokers indicating that the use of non-bank lending has reached a five-year high, Hilton-Baird’s survey also found that asset finance and invoice finance both increased in popularity on an annual basis.
Commenting on the findings, Managing Director of Hilton-Baird Financial Solutions, Evette Orams, said: “We believe it’s vitally important that businesses are always monitoring the changing lending landscape. The commercial finance industry never stands still and, particularly when combined with the improving economic picture, what might have been right for a business six months ago might no longer be the optimum solution.
“However it is important that businesses consider the overall value of any facility rather than simply focusing on cost. Often, reductions in headline costs can cost dearly as the impact of that one poor buying choice could be a significant hindrance.
“Other factors such as service levels, flexibility and, of course, the level of funding it would provide should be the main focus and consideration, in order that the facilities secured will enable that business to achieve its objectives.”