To the excessively cautious, buying on credit is like getting drunk - the buzz comes immediately and gives you a lift, but the hangover that follows can be painfully debilitating. Ian Vallely dishes out the paracetamol. Credit is the financial engine that powers progressive manufacturers, because it pays for the investment in new plant and equipment that drives them forward. Businesses that invest in more efficient or productive kit find themselves at a significant competitive advantage over those that are conserving cash, or put off making investments due to lack of finance. Sadly, though, there are far too many of the latter. A third of UK companies are turning down orders worth more than ￡5.4 billion rather than investing in new equipment, according to a recent survey by asset finance provider Lombard. Around a quarter of those surveyed said they were using equipment that needed to be replaced and, of these, nearly three-quarters said this was resulting in higher maintenance bills. A staggering two-thirds said old plant and equipment had cost them orders. So there are pressing business reasons to invest in new plant and equipment. But assets - ranging from CNC machines to air conditioning units, forklift trucks to IT equipment - need to be financed.
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