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XL Business Finance Blog » Blog Archive » Obtaining asset finance in the credit crunch

Obtaining asset finance in the credit crunch

So the banks have been told to start lending money to businesses and individuals to help kick start the economy. The truth is the banks have had their fingers burnt (deservedly so, some may say).

All high street banks and finance companies have tightened their underwriting criteria. Some have withdrawn from certain sectors and some have withdrawn completely. The result is that there seem to me more deals knocking around the broker market as customers are trying to find equipment finance for their acquisitions and investments.

The problem is that the second and third tier funders are awash with more deals than they have ever had. In uncertain times and possibility of a long recession, these second and third tier funders are cherry picking deals. They are concentrating on hard assets with good residual value, strong covenants and a good PG. Their attitude is a ‘take it or leave it’ mentality, as they know the customers have little choice. Interest rates tend to be on the higher side as they know the banks and high street finance companies are not playing ball.

The result is little choice and higher rates. It is now very difficult to organise finance for new start businesses,  high tech equipment and businesses with a poor trading history. The good news is that there are still funders which can cover most eventualities (however there are fewer of them) and a good finance broker has never been able to add as much value.


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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

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