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When ING Group announced a few weeks back that it would be selling its savings firm, ING Direct UK, to Barclays plc, analysts were immediately concerned with the effect this would have on UK savers. Discussions at the fore included possible reductions in security for savings and the overall impact on online banking. However, it is ING Group’s more recent decision that is of greater concern to small and medium business owners.
The Dutch Group announced that it would discontinue new business deals and payouts by its Surrey-based subsidiary, ING Lease UK, from the close of business on the 30th of November 2012. The company has been acting as an asset finance provider by entering into leasing arrangements with small businesses that need office equipment, vehicles, machinery or other general assets. These arrangements are vital to SMEs which face limited options in alternative sources of finance such banks or capital markets. To put it in focus, this year 31 per cent of total investment in new equipment and machinery was purchased through leasing arrangements. According to its website, ING Lease UK manages leasing agreements with over 85,000 customers every year. Its ‘middle ticket’ sector also provides financial products and block discounting to medium-sized enterprises. Coupled with the exit of Lombard Vehicle Management earlier in the year, ING Lease UK’s cessation will deal a blow to finance brokers who are still uncertain of finding a successor among its competitors.
Whereas initiatives such as the Enterprise Investment Scheme and the Funding for Lending Scheme are being promoted with the intention of injecting more funds into the UK economy, SMEs will be looking to government to do even more in the months to come.
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