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Strong growth underway in IT business investment

Revised business data for the performance of the UK Economy in 2015 has recently been published by The Office for National Statistics and The Bank of England.

The information released makes happy reading for suppliers of IT equipment. Business investment, of which IT makes a significant contribution, has been growing strongly.

Total business investment between Quarter One and Quarter Two increased by 1.6% and was 3.1% higher than a year earlier, however investment in ICT and other equipment and machinery increased by 3.0% in the second quarter of the year and was 3.5% higher than a year earlier which shows an accelerated investment trend in this particular sector.

Whilst some larger businesses have been using cash reserves, built up by under-investment between 2008 and 2013, to fund their IT acquisitions, many smaller businesses remain dependent on banks and leasing companies to ensure that they have the technology to remain competitive.

The Bank of England in their latest update reported that credit availability and demand within the corporate sector remained unchanged between Quarter One and Quarter Two, but so far as smaller and medium sized businesses are concerned both supply and demand for credit grew in the early part of the year, a trend expected to continue into Quarter Three. So far as borrowing costs are concerned, the Bank notes there was a significant fall in the price of loans to large corporates but no real change in borrowing costs for smaller businesses between Quarter One and Two. The Bank of England will release their Quarter Three review within the next couple of weeks and we will then see if the predictions for Quarter Three proved correct and their forecast for the final quarter of the year.

Leasing remains a highly attractive option for funding IT investment and BNP Paribas Leasing Solutions have seen a strong increase in the number of ‘software only’ deals being transacted. This confirms an industry trend in which hardware is rapidly becoming a less significant component of IT expenditure. It is important that resellers and solution providers make themselves fully aware of the flexibility available within current leasing packages.

Andy MilsomAndy Milson, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme  – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on
07966 114 243 or email here.

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Suhale Vorajee
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BNP Paribas Leasing Solutions UK

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