£393m fall in IT investment!
Investment by UK businesses into IT has dipped once again, says Syscap, the independent IT finance provider.
This year investment in IT fell by 10%, from £3.91 billion to £3.52 billion*. This is in stark contrast to the figures for overall business investment, which showed a robust increase of 3.45%, from £32.16 billion to £33.32 billion, in the same period.
Syscap Chief Executive Philip White says the decline in investment in IT is exacerbated by the difficulty businesses are encountering in securing finance for IT.
Explains Philip White: “Banks are traditionally uncomfortable with lending to businesses so that they can invest in IT equipment.”
“Often the cause of this is that banks lack the specialist knowledge to assess the long-term value of IT equipment, and feel uneasy about providing loans against an asset they find hard to price. However, banks tend not to be so cautious when providing finance against more traditional assets, such as commercial vehicles or plant and machinery.”
According to Syscap, declining investment in IT may lead to a global shift, leaving the UK less competitive internationally.
Says Philip White: “Maintaining a modern IT infrastructure is a vital factor in national productivity. This trend in underinvestment in IT is not seen, for example, in Germany- quite the opposite – they have seen a strong increase in IT investment over the past three years.”
Syscap comments that Government policy is also not as supportive of investment in IT as it should be.
Adds Philip White: “In 2012, the Annual Investment Allowance, which provided 100% tax relief on IT investments up to £100,000, was reduced to just £25,000. From our point of view, the scrapping of that tax incentive is very unfortunately timed. More needs to be done to encourage UK businesses to invest more in IT, not less.”
Syscap say that it is vital for businesses to be aware of their options in IT financing, rather than overlooking IT investment in the challenging business lending environment.
Concludes Philip White: “Interest rates for business loans remain high, and banks are often not the answer for firms looking for IT finance. Specialist finance firms are often more comfortable than traditional banks with providing solutions for IT procurement.
Syscap is a visionary provider of smart, cost-effective business to business finance solutions, specialising in IT finance with support for our channel partners at the very heart of our business. We work with many of the UK’s brightest and most ambitious organisations in the commercial, professional and public sectors. Our expertise and unique range of products underpin our ability to meet the funding needs of our customers.
For more information on our products and services please email us at email@example.com or call 020 8254 1975.