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News Release from: Manufacturing Technologies Association
Edited by the Manufacturingtalk Editorial
Team on 13 November 2007
Machine tool purchase finance is still
there
In spite of the ongoing turmoil in the world's credit markets there has not been much evidence that it is adversely affecting machine tool purchasing, said the MTA.
The UK's Manufacturing Technologies Association (MTA) said that turmoil in the credit markets, set off by the sub-prime mortgage crisis in the USA, is undoubtedly a worry for businesses far and wide, including the UK For suppliers of machine tools and manufacturing technologies there have been some fears that the credit crunch will slow buying as manufacturing companies are unable to borrow sufficient finance to make such large purchases
This article was originally published on Manufacturingtalk on 13 Apr 2004 at 8.00am (UK)
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The recent MTA forecast, however, predicted almost 10% growth on last year for the sector and is well above that of the UK GDP.
The MTA said that there was no sign of struggling sales whilst buyers grapple with potential uncertain borrowing restrictions caused by the credit crunch.
MTA Statistical Manager, Geoff Noon, commented: "Given the importance of the financial services sector to the UK economy, the credit crunch is likely to have an adverse effect on 'UK plc', but the exposure of the engineering sector to these problems is relatively small.
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With inflation falling, we could see the Bank of England cutting interest rates to help ease the worries in the financial markets if the credit crunch persists and this would be a positive move for the sector".
MTA Associate Member, Close Asset Finance, is predicting that whilst the touted financial problems caused by the credit crunch could have an adverse impact on sales there are still numerous finance companies out there who will be in a position to loan money at competitive rates for machine tool purchases.
Director at Close Asset Finance, Steven Gee, commented: "The credit crunch is likely to stick around and we've probably not seen the worst of it yet.
In terms of liquidity banks are keeping their money to themselves and maintaining reserves of cash and some banks and lenders are expecting to be hit hard by the crunch.
In terms of borrowing for machine tool purchases the effects of the credit crunch shouldn't lead to a lack of finance options available for buyers.
There are finance companies that will undoubtedly be struggling to offer loans, these are the companies that tend to borrow short-term and then lend back to the customer long term and therefore face short-term liquidity.
However there are numerous companies like Close Asset Finance who borrow long-term and lend short-term and can therefore ride out the storm.
The message really is not to panic - viable finance options will still be available if you shop around.".
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