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1 in 3 SMEs using old machinery longer than planned

Many SMEs have had no choice but to extend the life of their existing assets due to ongoing supply chain difficulties, highlighting the importance of good supplier and inventory management.

A survey of over 500 businesses by Paragon Bank found that 30 per cent of SMEs had operated existing machinery beyond its expected lifespan over the past 12 months. A similar proportion said they had acquired pre-owned machinery due to unavailability of new equipment, while a fifth have had to refinance existing assets.

The findings correspond with separate research last year which found the demand for second-hand equipment and machinery in the UK had reached record-levels.

Supply chain risks can be managed and mitigated to a certain extent with an effective supply chain strategy and optimised inventory management.

Our specialist Manufacturing Team re-focused much of their support to these areas in the aftermath of the COVID-19 pandemic, delivering supply chain strategy workshops through the Hub’s Strive and Thrive webinar series.  

One of the many Greater Manchester manufacturers supported included Bury-based Multiwood Products Ltd, which suffered “massive holes” in its stock during the pandemic, leaving it with little choice but to bring some of its manufacturing in-house. 

Following support to secure funding and embed good manufacturing practice across its factory, the business went from being able to manufacture 100 units in-house per month to 2,000, in spite of supply chain challenges.

Read Multiwood’s story

The issue with the supply of new equipment forms part of wider issues many SMEs still face within the broader supply chain. According to the survey, 43 per cent of SMEs said the cost of goods and services in general had worsened in the last three months, while 43 per cent said availability had deteriorated.

Companies also recorded a slight overall deterioration in the reliability and financial stability of suppliers.

John Phillipou, Paragon Bank SME Lending Managing Director, said:

“Supply chains were significantly disrupted by the COVID pandemic and are only just getting back on their feet today. Up until recently, it was near impossible for SMEs to secure the new assets they required, so they have been forced to use existing assets for longer.

“More broadly, companies have experienced disruption in their supply chains, particularly in areas such as the availability and cost of goods.”


GC Business Growth Hub was part financed by the European Regional Development Fund (ERDF) 2014-2021, as part of a portfolio of ERDF-funded programmes designed to help ambitious SME businesses achieve growth and increase employment in Greater Manchester. Eligibility criteria was applied. The 2014-2021 ERDF  fund was allocated by the European Union that finances convergence, regional competitiveness and employment and territorial co-operation.

Department for Levelling Up, Housing and Communities (DLUHC), formerly the Department for Communities and Local Government was the managing authority for the European Regional Development Fund Programme, which was one of the funds established by the European Commission to help local areas stimulate their economic development by investing in projects which will support local businesses and create jobs. For more information, visit European Regional Development Fund: Documents and Guidance - GOV.UK (www.gov.uk)

If you would like to know more please contact us at bgh@growthco.uk

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