Solving the problem of achieving growth for SMEs

With the Federation of Small Businesses (FSB) reporting that SMEs account for 99.9% of all the private sector businesses in the UK; it is obvious how dependant the UK economy is on this sector growing, developing and thriving.

So, what does it take for growth to occur?

For a business to grow and develop there needs to be financial stability on the balance sheet, therefore being able to fix monthly expenditure and accurately forecast revenue is essential.

Businesses need to be prepared to be at their most competitive and efficient for growth to occur. To achieve this the equipment, assets and technology need to be operating at the most efficient level and be the most up to date versions. Without the latest equipment and technology a business will be trading at a distinct disadvantage. A business must have the capacity to accept more customers/business as well as maintain and develop current customers and accounts. Not having a large enough team of staff, or your team using outdated equipment could be preventing maximum productivity.

So, this is the big debate: your business needs to be offering the best service, with the latest technology and highest productivity levels; whilst still being cash savvy and avoiding high expenditure. Unfortunately, it has been reported by the FSB in the past that 42% of SMEs that applied for loans were turned down. Plus, the British Business Bank report for 2018 states that 1 in 3 SMEs want to grow but are unsure how.

How to solve the problem?

There is no need to use capital expenditure to make any asset purchases. It is far better to keep the capital within the business and achieve a greater return on capital employed (ROCE). There is also no need to use credit facilities with your business bank such as overdraft facilities, credit cards and loans. Again, it is far better to save these credit lines for other purposes.

The solution is to use leasing to make the asset purchases your business needs to help it thrive and drive the growth and development that you desire.

The benefits of leasing:

• Offset the payments against taxable income saving corporation tax

• Purchase higher specification assets than budget dictates

• Maintain cash flow by avoiding large capital outlays

• Low fixed rate repayments

• Invest in other areas with a return on capital employed

• Manage and upgrade obsolescent assets

• Avoid owning depreciating assets

These are just a few of the reasons why most accounting firms encourage the use of leasing and why 95% of the Times Top 100 companies use leasing for their asset purchases.

Baker Leasing have been established for over 17 years and are industry experts in the IT leasing sector. We are also able to arrange flexible financial solutions including leasing tailored to meet your requirements on any of the following assets:

• IT hardware

• 100% software and services

• Office furniture and fit out

• Air conditioning

• Audio visual

• LED lighting

• Telephony

• Machinery

• Vehicles

• Any other business assets

Contact Baker Leasing today to discuss your purchasing plans for 2019

01494 974 888