A new UK-wide fund to help businesses improve their productivity by investing in technology and equipment has been launched by the Bank of Scotland (www.bankofscotland.co.uk).

The £500 million asset finance fund will allow companies to spread the cost of investment over the lifetime of the machinery, rather than squeezing their working capital by paying the whole amount upfront.

It is expected to be of particular benefit to small and medium-size businesses in the manufacturing, construction, agriculture and transport industries.

The launch comes amid mounting evidence that companies are cutting back on capital investment.

This includes new research from the Bank of Scotland, which has identified ‘inadequate investment’ as one of the key obstacles preventing improvements to productivity.

Its report, Understanding the Puzzle, found that manufacturing firms in particular believe new machinery is a key way to boost productivity.

Bank of Scotland regional director Fraser Sime said the fund is geared to support sectors where high-specification machinery and innovations like automation can boost growth in a competitive market-place.

“The UK’s low level of productivity compared with its G7 peers remains a challenge, and it’s crucial we work closely with businesses to ensure that they have the tools they need to make efficiencies and grow.

“This asset finance fund shows our commitment to helping businesses in Britain prosper.”