Nearly seven in 10 (68 per cent) commercial finance brokers have seen “little to no change” in the willingness of lenders to fund soft assets, research from Asset Advantage has suggested.
The survey found there was little appetite from lenders to fund soft assets such as software, telecoms equipment, office furniture or soft furnishings.
Compared to hard assets, such as machinery, vehicles, and heavy equipment, soft assets are considered less secure due to their lower residential value.
Despite this, they generally include business critical equipment, yet brokers continue to face difficulties in finding appetite among funders.
To illustrate this point, one broker said: “Similar appetite to fund soft assets in the market, in fact it has not seemed to have changed much over the last 10 years.”
Asset Advantage credit and risk director, Philip Knight, said: “Soft assets can sometimes be challenging for brokers to fund and our latest data shows that it doesn’t seem to be getting any easier.
“It ultimately comes down to the funder’s approach to risk and how willing they are to look beyond equipment valuations and to the credibility of the proposal and the business behind it.”
In contrast, more than 20 per cent of brokers said that conditions have worsened.
Replying to the survey, one broker said: “Funders are becoming more specific on the assets they will fund and this naturally moves the range of assets away from soft.
“Only a few consider soft assets and their balance sheets have to be robust.”
tom.dunstan@ft.com
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