Accessing funds to finance equipment has got harder but there are routes to capital that specialist brokers can help SMEs to navigate.
The economic downturn, interest rate rises, inflation and the writer’s strike, plus ongoing budget cuts for unscripted TV among public service broadcasters, have combined to make the equipment asset finance market the worst it has been for years.
“It’s a perfect storm that was not forecast,” says Duncan Payne, director, Adamantean. “The current market is like nothing we’ve seen in years.”
“A number of issues have conflated to raise the barrier to entry for those companies in this sector seeking access to finance,” says Tom Perkins, director and co-founder at Charles & Dean.
The impact has been felt most by the kit rental companies. Manchester’s Pro Motion Hire was bought out of administration at the beginning of this year by Pixipixel rental but major rental company Procam Take 2 couldn’t be saved when it went bust in July.
Asset finance is the most common use of funding for any production equipment used by equipment rental companies, freelance camera operators, production companies and post facilities among others. According to Payne, this group “has been on an absolute rollercoaster since February 2020, with no sign of this feast or famine ending anytime soon”.
From the outside it would seem as if interest rate volatility would be a major factor on a client’s ability to finance new gear. Experts take a longer-term view.
“Sure, interest rates have gone up but the average over the last 50 years is over 7%,” says Payne. “The issue is that rates have seen a sharp rise after being so low for so long.”
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‘Deal or No Deal’ by Adrian Pennington, British Cinematographer