May/2012 FINANCING FOR ASSETS

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1 May/2012 FINANCING FOR ASSETS

2 Contents Introduction 1 Assets that manufacturers are acquiring 2 Understanding what drives purchase behaviour 3 Manufacturing plant and machinery replacement cycles 5 Funding decisions for assets internal finance 6 Funding decisions for assets external finance 8 Asset finance awareness and usage 10 Conclusion 13

3 1 Introduction Welcome to EEF s survey on financing for assets. This independent report by EEF s Information and Research Team is focused on the purchase of assets and summarises the results of a survey that was conducted across our manufacturing members at the end of It represents the views of members across the UK regarding purchase behaviour over the past three years and their perceptions for the next three years. The economic backdrop to this survey was an apparent weakening in output and orders at the end of 2011, with manufacturers confidence for 2012 seemingly fragile 1. However, even in uncertain times, companies were still focused on growth and looking for new opportunities and markets 2. More recent data from our trends survey 3 has in fact revealed an improvement in manufacturers confidence, with output and new orders increasing in early 2012 and further optimism for quarter two. The research explores and summarises the asset purchase behaviour of UK manufacturers, as investment in such a capital-intensive sector is critical for survival and growth. We were keen to establish how companies are financing their acquisitions and the drivers behind these decisions. In a climate of increasing pressure on financial institutions to lend, combined with the need from businesses to access funding on the right terms, we have also assessed manufacturers awareness of the finance products that are available for asset purchase. 1 EEF Manufacturing Outlook, December EEF Executive Survey EEF Manufacturing Outlook, March 2012

4 Financing for Assets May Assets that manufacturers are acquiring Before looking at manufacturers experiences of finance and lending, we first needed to establish what assets they have been acquiring and also their purchase plans in the medium term. The past three years have been difficult for businesses: they have had to contend with a poor economic climate and the credit crunch. In the final quarter of 2008 manufacturing GDP fell by 5%, and for most of 2009 the GDP figures remained negative. In 2010 and the early part of 2011 there was some improvement for manufacturing, which has accounted for close to a quarter of growth in the economy since the recession ended. In the final quarter of 2011, when this survey was undertaken, there was a weakening of the whole economy with (estimated) GDP falling by 0.3% and manufacturing down by 0.7%. Despite the economic climate, virtually all the respondents to the survey said they had acquired assets in the past three years, with 93% investing in machinery or plant. IT hardware or software had also been purchased by the vast majority. Companies told us that they had acquired a variety of assets. Around two-fifths reported that they had purchased manufacturing plant or machinery along with IT (hardware or software) and vehicles. A small minority (4%) had just acquired manufacturing plant or machinery, and even less bought only IT equipment or vehicles. It was noticeable that the overall purchase behaviour was consistent across all sectors of manufacturing, all regions and sizes of company. What our research did not set out to discover is the amount of assets being purchased and how this has changed in recent years. However, official data on business investment (which includes buildings and property) suggests that total manufacturing investment has increased year on year from 2009 to In fact in 2011 manufacturing investment was over 13 billion in the UK 4. According to our survey, in the next three years 89% expect to obtain manufacturing plant or machinery and nearly three-quarters plan to buy IT hardware or software. This shows that companies plan to continue acquiring assets in a similar vein in the medium term. Purchase of vehicles clearly remains an investment intention, with over half of manufacturers suggesting they will invest in these. Chart 1 Asset acquisition % of companies acquiring assets past and next three years % Buildings/ property IT (hardware and software) Past 3 years Manufacturing plant/machinery Next 3 years Vehicles None Other Again, this is not just one asset type; most manufacturers are expecting to invest in at least two different asset categories, with 31% anticipating purchase of IT along with manufacturing plant or machinery and vehicles. This evidence of planned investment by manufacturers is backed up by the positive outlook shown in the latest EEF business trends data 5, which indicated that companies are seeing an improvement in conditions. Forty per cent said they saw a rise in output in quarter one and 43% expect output to increase in quarter two. In addition, new orders look positive for manufacturers. Only a tiny proportion of companies (6%) said they had no plans to acquire any tangible assets in the next three years. The primary reasoning behind this lack of planned investment is that they expect only to replace assets if they actually break down. 4 Office for National Statistics, Statistical Bulletin: Business Investment, Q (Note quarter 4 and 2011 data is estimated) 5 EEF Manufacturing Outlook, March 2012

5 3 Understanding what drives purchase behaviour Having established that manufacturers have been acquiring assets over the past three years and plan to continue to do so into the near future, it is important to understand what they are buying them for. Does their purchase behaviour indicate any sign of investment for growth, or are they merely replacing what is necessary in order to continue to produce? Reflecting the on-going challenge to improve competitiveness, which has seen UK manufacturing productivity grow by an annual average of 3.6% in the past ten years 6, increasing productivity comes out of our survey as one of the key drivers in both the past and the future. Wanting or needing to increase productivity and efficiency is important to the majority of firms regardless of size, with over 80% giving this as a past and a future motivation. This is supported by our EEF Executive Survey 7, which found that 57% of companies felt that improving productivity was one of their top three business priorities for Seventy-eight per cent of manufacturers said that over the past three years at least one of the reasons for spending on assets was that they were changed as part of the normal replacement cycle. Furthermore, 85% gave this as a basis for planned asset investment in the next three years. Table 1 Multi-purchase behaviour % of companies giving reasons for asset acquisition past and next three years Past 3 years Next 3 years Increase productivity and efficiency Normal replacement cycle Replace obsolete/broken plant/ machinery 63 * To provide capacity for growth Reduce energy consumption Change in business direction/ product manufacture Other 2 1 * This was not an option for the Next 3 years' question Decreased use of energy was of particular interest to larger firms. Fifty-seven per cent of those with a workforce of over 250 employees said that they had acquired assets in the past three years in order to try to reduce energy consumption, and slightly more intend to do this in the next few years. This need to find energy savings is backed up by the AMR 2011 survey 8 which found that 58% of companies had addressed energy efficiency and nearly a quarter planned to do so. Our survey suggests that manufacturers are still growing, with 59% saying they bought assets in order to provide capacity for growth, and even more (67%) expecting to acquire assets to enable development in the next three years. Bigger companies in particular seem to be focusing on growth, as 80% of the largest companies (251+ employees) gave this as a reason for acquiring assets in the next three years, compared to only 59% of small firms (employing up to 100 people). The EEF Executive Survey 7 also points to potential growth, with only 9% of the manufacturers surveyed saying they cannot identify growth opportunities for Acquiring assets to allow for a change in business direction or product manufacture again seems to be correlated to company size, with a quarter of small firms stating this as a reason for purchasing assets in the last three years compared to nearly half of the large manufacturers. It is clear from our research that manufacturers feel there are multiple drivers behind their purchase behaviour. On average, companies gave at least three explanations as to their past and future asset purchases, and few had only one motivation. For example, 63% said they had to replace obsolete or broken plant/machinery in the last three years, yet only 1% told us that this was the only reason for purchasing assets. 6 Office for National Statistics, Labour Market Statistics, February EEF Executive Survey The Manufacturer, The Annual Manufacturing Report 2011

6 Financing for Assets May Chart 2 Past drivers behind asset purchase % of companies (by company size) giving reasons for asset purchase past three years Large Medium Small 88% 88% 88% 75% 86% 90% 48% 61% 57% 70% 72% 38% 75% 53% 42% 51% 25% 27% Normal replacement cycle Change in business direction/product manufacture Increase productivity and efficiency To provide capacity for growth Reduce energy consumption To replace obsolete/broken plant/machinery Chart 3 Future drivers behind asset purchase % of companies (by company size) giving reasons for asset purchase next three years Large Medium Small 91% 85% 80% 91% 89% 71% 60% 42% 79% 44% 76% 59% 43% 24% 24% Normal replacement cycle Change in business direction/product manufacture Increase productivity and efficiency To provide capacity for growth Reduce energy consumption

7 5 Manufacturing plant and machinery replacement cycles Looking only at manufacturing plant and machinery, we were keen to find out how often companies replace their equipment. Respondents were asked to specify the proportion of plant and machinery they replaced in four time spans: 1 3 years; 4 6 years; 7 10 years and over 10 years. What is apparent is that there is a wide variance in replacement cycles, with some plant and machinery being changed within three years and others expected to last over ten years. This pattern is backed up in a statement from one of our members who said that some manufacturing plant and machinery will have very long replacement cycles, but in their experience the more technically advanced and expensive machinery has shorter life cycles as newer technology soon makes this equipment outdated. The range of replacement cycles is shown in Chart 4. Some other key findings are detailed below: None of the respondents said they replaced more than 50% of their manufacturing plant and machinery in the first three years 8% said they have no planned life cycles of three years or less for any of their plant or machinery 4% said all their equipment is changed within a ten-year span 10% of respondents said they plan for over three-quarters of their plant and machinery to last more than ten years The vast majority of companies (71%) told us that the length of their replacement cycles for manufacturing plant or machinery had remained unchanged in the last three years. Of the 19% that said they had changed the length of replacement cycles, most (64%) had extended them, with only a third having reduced asset life cycles. Chart 4 Replacement cycles for manufacturing plant and machinery % of companies replacing equipment in each time span 0-25% replaced 26-50% replaced 51-75% replaced Over 75% replaced Over 10 years 7-10 years 4-6 years 1-3 years %

8 Financing for Assets May Funding decisions for assets internal finance Our research examines how manufacturers are funding their asset purchases. It seems that a large proportion are using their own cash reserves. Sixty-eight per cent said they used internal funds as one of the ways of funding asset acquisition. What is more, a third used only internal funds in the last three years. Our results show that this reliance on internal reserves is set to continue, with 61% of manufacturers telling us that they expect to draw on cash reserves for future purchases (in the next three years). Nearly half of these companies plan to use this as their only source of funding. Using internal financing as opposed to external funding appears to be widespread, with over a quarter of respondents to our survey obtaining at least some of their funding from their parent or group in the last three years and slightly more (30%) expecting to request finance from this source in the next three years. Research by others has found similar results. The 2011 AMR survey 9 ascertained that 80% of respondents said that they had used company reserves as a means to raise capital in the past two years. Why internal finance? We asked all those that told us they only used or planned to seek internal finance why this was the case. This included those that said they had relied solely on either one or a combination of internal funds, their parent or group, or a personal contact/family member. It looks as though the main motives behind not using external finance are related to a perceived lack of need, habit or an unwillingness to get into debt. Nearly half (47%) of those that had not used external finance in the last three years said that it was because they always obtain the finance they need for asset purchases from their parent or group. This pattern does not look likely to change: 49% of those expecting to use internal finance options in the next three years said that this is because they always go to their parent or group. Furthermore, 22% said that they had not sought external finance in the last three years because they did not want to get into debt. A similar proportion expressed this view for the forthcoming three-year period. Just having the funds or cash available was cited as a reason by a small sample (13%) in the last few years. 9 The Manufacturer, Annual Manufacturing Report, 2011

9 7 Chart 5: Sources of funding % of companies getting funding from each source past and next three years Past 3 years Next 3 years Finance broker 12% 13% Group/parent High street bank/ building society Internal funds 26% 28% 68% 30% 31% 61% Personal contact/family 2% 1% Specialist finance company 18% 17% Supplier of asset Other 12% 4% 3% 10% Chart 6 Why internal finance? % of companies giving reasons for not using external finance past and next three years External finance a risk to the business Do not trust external finance sources Confused about finance products available Unfavourable terms and conditions Concern would be refused external finance Would have taken too long to arrange Unwilling to have secured debt Other Costs of external finance too high Has cash/funds available Did not want to get into debt Always get finance from parent/group Next 3 years Past 3 years %

10 Financing for Assets May Funding decisions for assets external finance Our research found that external finance is also used by manufacturers for the purchase of assets, with the traditional route of the high-street bank or building society seeming to be the popular choice. Twenty eight per cent of companies have sought finance from their bank or building society in the last three years and slightly more plan to use them in the next three years. There is less take-up of specialist finance companies, finance brokers and suppliers of assets by manufacturers, both in the past and predicted for the future. Type of external finance products When we examined what types of external finance manufacturers are accessing, asset finance emerges as the most popular for acquiring assets. Eighty six per cent of those who used external finance in the last three years used some form of asset finance. What is perhaps more significant is that nearly half of those securing external funding told us they only used asset finance in that period. This pattern looks set to continue, with virtually the same proportion (85%) expecting to draw on asset finance in the next three years and 45% anticipating relying on this type of funding alone. Overdrafts account for some level of external funding, although use of this means of financing is less prevalent in manufacturing, with 24% of companies using them in the last three years and fewer still (18%) planning to exploit this medium in the next three years. The AMR survey 12 also found that asset finance has been more widely used by manufacturers in the last two years as a way of raising capital than loans and overdrafts. They found that 37% of manufacturers accessed asset finance in that period and that the same proportion plan to use this funding mechanism in the next two years. It is apparent from our survey that credit cards have not been seen as a source of funding for manufacturers, with only 1% using these over the last three years or expecting to in the next three years. However, this is not unexpected, as the use of credit cards and overdrafts are more commonly associated with financing companies running expenses. Table 2 Forms of external finance used to acquire assets Research produced in 2009 for the Finance & Leasing Association (FLA) showed that 39% of SME manufacturers that used external funding had utilised asset finance 10. In addition, the FLA has said recently that asset finance lending is increasing, with new lending (across all sectors) in January 2012, 23% higher than in January Our survey shows that loans are the next most widespread external finance choice, with 34% having paid for asset acquisition through loans in the past three years and a similar proportion expecting to utilise this medium in the future. % of companies using external finance products past and next three years Past 3 years Next 3 years Asset finance Loan Overdraft Other 7 7 Credit card 1 1 Analysis of our research highlighted the use of more than one finance option. For example, 17% of manufacturers used both loans and asset finance in the recent past and 14% utilised overdrafts and asset finance. 10 Open University Business School, Asset Finance and SMEs, March 2009 (data quoted excludes high-value finance) 11 Finance & Leasing Association, March 2012 (data quoted excludes high-value finance) 12 The Manufacturer, The Annual Manufacturing Report, 2011

11 9 Why external finance? So what drives manufacturers decisions concerning the type of external finance used to purchase assets? Our results suggest that there is not one clear reason. On average, respondents gave three motives for their choices of finance products. Knowledge of the long-term or full cost of the finance is a consideration for a large proportion of manufacturers. Forty-four per cent gave this as a reason over the past three years and half say this will be a driver in the next three years. Table 3: Why external finance? % of companies giving reasons for using external finance products past and next three years Past 3 years Next 3 years Knowledge of long-term/full cost Preferable interest rates Suited our needs Favourable terms & conditions Speed of acquiring finance Source of finance always used Preferable repayment period 26 * Minimal or no security required Probability of acquiring finance Preferable fees All that was on offer 11 * Tax efficient 9 15 Other 7 7 Recommended by finance provider 5 * Refused alternatives 1 * * This was not an option for the Next 3 years' question Preferable interest rates seem to have been of greater concern in the past. Two-fifths said this was an influencing factor in the previous three years, compared to only 34% who will consider them in the future. The fact that the finance product suits the needs of the company is seemingly becoming more important. Forty-six per cent told us it will be an aspect of their decisions in the future, compared to 38% who have considered this in the past. You can see from Table 3 however, that many other reasons were given for both past and future decisions. When manufacturers were asked to pinpoint the main reason behind external finance choices, a more polarised view became apparent, especially on past decisions. The same three motives of knowledge of long-term cost, interest rates and suiting the companies needs still come top, for both past and future decisions. Whereas issues such as favourable terms and conditions, a preferable repayment period and speed of access to the finance, which all feature in the evaluation process, do not seem to have been the primary drivers of decisions on finance products in the last three years. In contrast, what does not appear to have featured strongly in the decisions of manufacturers in the last three years were factors such as being refused alternative sources of finance or recommendations from finance providers.

12 Financing for Assets May Asset finance awareness and usage As already established in our research, one of the ways companies finance the acquisition of assets is through asset finance, where the lender has ownership of the asset and the borrower leases or acquires it via hire purchase, allowing companies to release the capital. We have further analysed the awareness and usage of this finance product, as this form of borrowing is most commonly used to fund items such as plant or machinery and vehicles, making it particularly relevant to the capital intensive manufacturing industry. The vast majority of manufacturers knew what asset finance was suitable for, with most (67%) pointing to manufacturing plant and machinery. Half the companies responding said vehicles were another type of asset that could be funded through this form of finance. Table 4: What asset finance is most appropriate for % of companies that state asset finance is appropriate for each asset % Manufacturing plant/machinery 67 Vehicles 50 Buildings/property 23 IT (hardware or software) 20 Don't know 14 Other 2 Our survey also assessed the usage and awareness of the different types of asset finance. Contract hire: A type of operating lease based on the operational life of an asset. It is a widely used option for funding vehicles. Monthly rentals are usually fixed and the asset does not appear on the balance sheet. Contract purchase: A similar arrangement to contract hire and frequently used for funding vehicles. At the end of the term the borrower has the option of purchasing the asset at a predetermined price. Finance lease: A leasing arrangement where the lessor (finance company) funds the cost of the asset and therefore legally owns the asset. However, the customer has control over the asset, providing them with the benefits and risks of economic ownership. At the end of the agreement the customer can opt to continue using the asset through paying a secondary rental or sell the asset and receive the majority of the sale proceeds. Hire purchase: Also known as lease purchase, this agreement is where title of the asset remains with the finance company during the contract period and transfers to the customer once the contract has completed and payment has been made in full. During the contract period, the customer has control over the asset providing them with the benefits and risks of economic ownership. The customer pays an initial deposit and repays the remainder of the cost plus interest over the period of the contract. Operating lease: A leasing arrangement whereby the lessor (finance company) has ownership of the asset and invests a residual value at the end of the term of the contract based on the estimated future value of the asset. The customer hires the asset over the agreed contract period. The benefits and risks of ownership remain with the lessor. At the end of the contract the customer typically has three options: to return the asset to the lessor, to extend the agreement or to purchase the asset. Sale and leaseback: A method of quickly releasing capital invested in assets already owned. The asset is sold to a finance company who leases it back to the original owner. It is often used for property but also for high-value or long life assets such as vehicles and some manufacturing plant/machinery.

13 11 There seems to be good awareness of all six of the asset finance products, although usage levels vary. The three products that are most used by manufacturers are contract hire, finance lease and hire purchase. Approximately 60% of respondents have or are using these forms of asset finance. Sale and leaseback does not seem to be as popular with manufacturers, with only 16% usage. However, uptake does seem to vary by company size, with a quarter of large firms having used or currently using sale and leaseback compared to 10% of small firms. Awareness of all the asset finance products was still very high, even by those that had not used them. Manufacturers not only know about the different types of asset finance that are available to them, but they also have good awareness of some of the providers, although understanding is limited to high-street names, and awareness of the more specialist providers is low. Ninety-five per cent or more were aware of providers such as Barclays, Lombard and Lloyds. Chart 7: Awareness and usage of asset finance % of companies who have used or are aware of asset finance products % 100 Using currently or past Aware of not used Never heard of Contract hire Contract purchase Finance lease Hire purchase Operating lease Sale & leaseback

14 Financing for Assets May Chart 8: Awareness of asset finance providers % of companies aware of each asset finance provider Barclays Asset Finance Lombard Lloyds TSB Commercial Finance GE Capital Europe Equipment Finance Santander HSBC Equipment Finance Handelsbanken Merchant House Finance Never heard of Aware of Aldermore Bank Ultimate Finance Group Private & Commercial Finance Group % The vast majority (70%) of those that had used asset finance felt that one of its benefits was improving cash flow. Only 13% felt that using asset finance had no benefits. Most said that there was more than one advantage to using this approach; nearly a third told us that the ability to match the agreement to the life of the asset was a benefit, and 32% mentioned flexibility. A quarter of respondents liked the quick decision they got. This became increasingly important for smaller firms, with 31% of the smaller companies giving this reason compared to 12% of the large firms. Of the small proportion of manufacturers that had never used any form of asset finance, the main reason given was that they had used another source of finance so did not consider it. Of the other reasons given, more than a quarter said that they had or have the cash available and therefore have no need to borrow.

15 13 Conclusion A consistent behavioural pattern across manufacturing has been established, in terms of asset purchase and funding decisions. Purchases tend to focus on plant and machinery and IT, with vehicles also procured. A large proportion of acquisition is done without external finance, as companies choose internal cash reserves or parent/group finance to fund acquisitions. The combination of having the cash available and not wishing to get into debt has meant that in the past three years around half the respondents to the survey did not use external finance to obtain assets. Those using external finance tend to stick to traditional sources such as the high-street banks and building societies, often using asset finance instead of loans or overdrafts. Overall awareness of asset finance is high, and users are aware of the benefits of this funding mechanism, especially in terms of cash flow. Background to the survey The online survey was sent out in late November 2011 to manufacturing companies across the UK. The survey was targeted towards finance directors and senior decision makers. Three hundred organisations responded to the survey. Eighty-one percent of companies that took part in the survey were small to medium-sized (SMEs) businesses employing up to 250 workers. When analysing our results we grouped companies into the following size bands: Small: Medium: Large: employees employees 251+ employees The respondents to the survey tended to be well established companies; over eighty per cent have been established in the UK for ten years or more.

16 Financing for Assets May Lombard commentary on EEF research Alexander Baldock, Managing Director Lombard Lombard is delighted to support this independent EEF report that explores asset purchase behaviour of UK manufacturers. As an organisation, Lombard believes strongly that the foundations for establishing stability in the UK economy lies in manufacturing, and specifically in the achievement of the growth potential both in the domestic and export markets. In this regard, it is encouraging that at the time of writing Markit tells us that the sector has grown at its fastest pace for ten months. Fundamental to building on this burgeoning growth, is recognition of the importance of investment and within this the significance of financing equipment in a way that is cost effective and financially sound. This is why this report provides an enlightening and timely view of the sector s outlook on the future and of the attitudes towards the fundamental issue of funding within the UK manufacturing community, in what is a key debate in enabling the delivery of economic recovery. While the journey to recovery is proving to be more challenging than we had hoped, it is encouraging to see that UK manufacturers are optimistic about future growth 89% have stated that they expect to invest in plant or machinery in the next three years, and there is strong underlying confidence within the sector. In addition, there is a firm commitment to increase productivity and improve efficiency, both of which will be fundamental to improving profitability throughout the manufacturing sector, as well as the UK economy as a whole. However, in order to achieve this, it will be important that manufacturers look at alternative forms of finance, or at least a combination of financing options that will allow their businesses to operate with greater flexibility within the current climate. However, the survey showed that 68% of respondents paid for capital investment from company reserves, a trend that appears set to continue as 61% indicated that they will draw on reserves for future purchases. This undoubtedly comes from the old adage that cash is king. Indeed, this is truer than ever in the current economic climate. However, spending valuable cash reserves on depreciating assets may not be best use of a business s financial resources, or provide the best return, particularly when cash reserves may be better utilised elsewhere in a business, whether for investment in vital R&D, negotiating supplier discounts or up-skilling staff. Alternatively, it may be prudent to ensure cash reserves are maintained so that they are available if required. This report captures the finance issues affecting many of our customers and its results show that there is an ongoing role for providers of financial services to ensure an understanding of the issues faced within manufacturing and to support the management of risk associated with current volatile input prices. It is also clear that by working together we can develop the infrastructure from which to drive forward a sector that continues to contribute 12% of the UK s GDP and to make up 50% of all UK exports, a sector that we truly believe holds the key to sustainable recovery in the UK. As a company that s foundations lie firmly in the manufacturing sector, today Lombard remains fully committed to the industry and to demonstrating how asset finance can support the sector and drive forward growth. Security may be required. Product fees may apply. In this context, it is pleasing to see that the work undertaken within the asset finance sector to raise awareness of this form of funding, along with its benefits, appears to be paying dividends 86% of those businesses that use external funding used some form of asset finance, and there is generally good awareness of the products and their benefits, as well as the major players in the market. The research indicates that asset finance is recognised and utilised within the manufacturing sector, and that the benefits provided by asset finance are well known. For more information about how Lombard could help your business grow, please log on to lombard.co.uk or call Type Talk Lines are open 8am to 6pm Monday to Friday. Calls may be recorded. Lombard North Central PLC. Registered in England No Registered Office: 3 Princess Way Redhill Surrey RH1 1NP

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19 About us EEF is dedicated to the future of manufacturing. Everything we do is designed to help manufacturing businesses evolve, innovate and compete in a fast changing world. With our unique combination of business services, government representation and industry intelligence, no other organisation is better placed to provide the skills, knowledge and networks they need to thrive. We work with the UK s manufacturers, from the largest to the smallest, to help them work better, compete harder and innovate faster. Because we understand manufacturers so well, policy makers trust our advice and welcome our involvement in their deliberations. We work with them to create policies that are in the best interests of manufacturing, that encourage a high growth industry and boost its ability to make a positive contribution to the UK s real economy. Our policy work delivers real business value for our members, giving us a unique insight into the way changing legislation will affect their business. This insight, complemented by intelligence gathered through our ongoing member research and networking programmes, informs our broad portfolio of services; services that unlock business potential by creating highly productive workplaces in which innovation, creativity and competitiveness can thrive. To find out more about this report, contact: Amanda Norris Survey Manager anorris@eef.org.uk EEF Information Line infoline@eef.org.uk About Lombard As the largest provider of asset finance in the UK, and voted best by Business Moneyfacts ( ), Lombard provides various forms of asset finance to businesses of varying sizes - from SMEs to large corporates - and in any sector. Products include Hire Purchase, Finance Lease, Operating Lease, Sale and Leaseback, Contract Purchase, as well as multi-specialist asset finance products such as marine, aviation and specific wholesale and stocking funding for distributors and dealerships. Having celebrated its 150th anniversary in 2011, Lombard is headquartered in Redhill, Surrey, with an extensive network of business centres situated throughout the UK, and is an appointed representative of The Royal Bank of Scotland plc, which is authorised and regulated by the Financial Services Authority. Security may be required and product fees may apply. lombard.co.uk Freephone Typetalk Published by EEF, Broadway House, Tothill Street, London SW1H 9NQ Copyright EEF May 2012

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