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    Finance

    Manufacturers’ sentiment continues upward trend

    • By MTDCNC
    • March 23, 2021
    • 3 minute read

    The Close Brothers Asset Finance Business Sentiment Index (BSI) continues to track steadily upwards for the manufacturing sector. Even as the full impact and duration of the pandemic has become better understood, manufacturing is proving to be well ahead of the overall UK level.

    After falling sharply in April 2020 from record highs at the start of the year, the index rose strongly in July. This was followed by a steady uptick in December.

    Key findings: 

    Manufacturing has been more resilient than most sectors during the pandemic, with many factories remaining open and continuing to be productive. 

    Two-fifths of manufacturers have missed a business opportunity because of a lack of available finance. This is despite the availability of CBILS (Coronavirus Business Interruption Loan Scheme) and Bounce Back loans.

    Firms’ willingness to invest has nearly doubled, reaching levels last seen in mid-2019.

    Manufacturing SMEs are cautiously optimistic about their own firm’s prospects, with 30% hoping to expand in the coming 12 months.

    Case study 

    At the start of 2021, we provided Luff Engineering with a bespoke CBILS (Coronavirus Business Interruption Loan Scheme) Hire Purchase agreement to finance the purchase of a new Grob G350 5-axis machining centre, which allows for the milling of parts made of a wide variety of materials. 

    Formed around 15 years ago, Wolverhampton-based Luff Engineering is a subcontract machine shop that predominantly machines cast iron parts but also aluminium.  

    The new 5-axis machining centre was purchased as a replacement for a machining centre that was becoming inoperable. Additionally, the new Grob was acquired to service new work being promised by existing customers. The new machine also increased production capacity for the subcontracting company, allowing them to increase their customer base. 

    Andrew Maude, Area Sales Manager for Close Brothers Asset Finance, explains more about this complex deal. Andrew says: “Luff Engineering had an existing finance agreement with us with around nine months remaining and we contra-settled the existing agreement, rolling it into the new agreement. This meant that the customer didn’t have to put a deposit down on the new machine, allowing them to conserve their cash flow. Furthermore, it also meant they only had one monthly direct debit to pay rather than two. At the same time, we settled off an existing BBLS (Bounce Back Loan Scheme) loan that was taken at the start of the pandemic, which made Luff eligible for CBILS.”

    Jason McDonnell, Managing Director of Luff Engineering added: “The previous machine was getting difficult to maintain and we needed to move on to something that could cope with our increased workload.”

    “We’ve been working with Close Brothers Asset Finance for some time now and we were confident that they could structure a funding deal that would work for us, and I’m delighted that they’ve been able to do just that. 

     “Industry knowledge is really important, and this is where Close Brothers Asset Finance really stands out. They clearly understood what we wanted to do and worked out a deal that suited our needs.”

    For more information about Close Brothers Asset Finance visit www.closeasset.co.uk

    https://cdn.mtdcnc.global/cnc/wp-content/uploads/2021/03/23175247/2-640x360.jpg

    Manufacturers’ sentiment continues upward trend

    The Close Brothers Asset Finance Business Sentiment Index (BSI) continues to track steadily upwards for the manufacturing sector. Even as the full impact and duration of the pandemic has become better understood, manufacturing is proving to be well ahead of the overall UK level.

    After falling sharply in April 2020 from record highs at the start of the year, the index rose strongly in July. This was followed by a steady uptick in December.

    Key findings: 

    Manufacturing has been more resilient than most sectors during the pandemic, with many factories remaining open and continuing to be productive. 

    Two-fifths of manufacturers have missed a business opportunity because of a lack of available finance. This is despite the availability of CBILS (Coronavirus Business Interruption Loan Scheme) and Bounce Back loans.

    Firms’ willingness to invest has nearly doubled, reaching levels last seen in mid-2019.

    Manufacturing SMEs are cautiously optimistic about their own firm’s prospects, with 30% hoping to expand in the coming 12 months.

    Case study 

    At the start of 2021, we provided Luff Engineering with a bespoke CBILS (Coronavirus Business Interruption Loan Scheme) Hire Purchase agreement to finance the purchase of a new Grob G350 5-axis machining centre, which allows for the milling of parts made of a wide variety of materials. 

    Formed around 15 years ago, Wolverhampton-based Luff Engineering is a subcontract machine shop that predominantly machines cast iron parts but also aluminium.  

    The new 5-axis machining centre was purchased as a replacement for a machining centre that was becoming inoperable. Additionally, the new Grob was acquired to service new work being promised by existing customers. The new machine also increased production capacity for the subcontracting company, allowing them to increase their customer base. 

    Andrew Maude, Area Sales Manager for Close Brothers Asset Finance, explains more about this complex deal. Andrew says: “Luff Engineering had an existing finance agreement with us with around nine months remaining and we contra-settled the existing agreement, rolling it into the new agreement. This meant that the customer didn’t have to put a deposit down on the new machine, allowing them to conserve their cash flow. Furthermore, it also meant they only had one monthly direct debit to pay rather than two. At the same time, we settled off an existing BBLS (Bounce Back Loan Scheme) loan that was taken at the start of the pandemic, which made Luff eligible for CBILS.”

    Jason McDonnell, Managing Director of Luff Engineering added: “The previous machine was getting difficult to maintain and we needed to move on to something that could cope with our increased workload.”

    “We’ve been working with Close Brothers Asset Finance for some time now and we were confident that they could structure a funding deal that would work for us, and I’m delighted that they’ve been able to do just that. 

     “Industry knowledge is really important, and this is where Close Brothers Asset Finance really stands out. They clearly understood what we wanted to do and worked out a deal that suited our needs.”

    For more information about Close Brothers Asset Finance visit www.closeasset.co.uk