Lloyds bank has launched a £500m growth fund to allow British firms to invest in high-spec technology, equipment and machinery.
The asset finance fund will give businesses of all sizes, including small companies and SMEs, the ability to make crucial investments without putting working capital budgets under huge pressure.
The aim of the £500m fund will be to help businesses in sectors where high-spec machinery and innovative systems, including automation and other technologies, can be a big boost to productivity and output.
Companies in the agriculture, manufacturing, construction and transport sectors, for example, are therefore expected to be the main beneficiaries of the fund.
Commenting on the launch, managing director SME at Lloyds Bank Global Transaction Banking, Ben Stephenson, said: “This fund will enable more businesses to benefit from the flexibility of asset finance, which can be used to support firms’ needs throughout the economic cycle, whether that’s investing in growth or boosting efficiency.”
Asset finance enables business owners to buy vital machinery or equipment and spread the costs over the lifetime of that equipment. By allowing for smaller payments to be made over many years, as opposed to needing large upfront payments, asset finance eases the pressure on firms’ working capital.
Research previously conducted by Lloyds revealed that lack of working capital investment was a key obstacle for businesses in certain sectors, preventing productivity.
Lloyds bank’s “Understanding the Puzzle” report showed that improving productivity was actually a primary focus for the investment plans of many businesses. In particular, owners from the manufacturing sector identified the procurement of new machinery as an important way to achieve productivity.
In light of the report’s findings, managing director SME at Lloyds Bank Commercial Banking, Gareth Oakley, said: “The UK’s low level of productivity compared with its G7 peers remains a challenge, and it’s crucial we work closely with businesses to ensure they have the tools they need to make efficiencies and grow.”
Stephenson added: “The pace of technological change is constantly challenging important UK sectors to invest in growth to remain competitive. But businesses need to be able to achieve this without damaging their access to working capital.”
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