Asset finance market falls by 14%

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 14% in October 2020 compared with the same month in 2019.  In the ten months to October 2020, new business was 26% lower than in the same period in 2019.

The commercial vehicle finance sector reported a fall in new business of 6% in October 2020 compared with the same month in 2019.  Over the same period, the IT equipment finance and plant and machinery finance sectors reported falls in new business of 31% and 20% respectively.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said “Increased business uncertainty from the introduction of new restrictions to tackle rising coronavirus cases and the lack of a free trade agreement with the EU has weighed on business investment and demand for asset finance.  The FLA’s latest data shows that asset finance new business was 26% lower in the ten months to October 2020 than in the same period in 2019.”

“The outlook for the UK economy has improved with the promised rollout of a vaccine before Christmas.  The asset finance industry is in an ideal position to support businesses as they make the investment needed to increase productivity and build a sustainable future post-crisis. We urge the Government and Bank of England to ensure a level playing field so that non-banks can continue to lend to those businesses that will drive change.”

	Oct 2020	% change on prev. year	3 months to Oct 2020	% change on prev. year	12 months to Oct 2020	% change on prev. year
Total FLA asset finance (£m)	2,639	-14	7,375	-14	27,812	-22
Total excluding high value (£m)	2,474	-14	6,980	-13	25,928	-22
Data Extracts:   By asset:
Plant and machinery finance (£m)	493	-20	1,479	-19	5,947	-21
Commercial vehicle finance (£m)	729	-6	1,999	-9	7,028	-24
IT equipment finance (£m)	164	-31	552	-23	2,641	-3
Business equipment finance (£m)	164	-17	461	-22	1,836	-22
Car finance (£m)	748	-16	2,104	-9	7,347	-27
Aircraft, ships and rolling stock finance (£m)	12	-76	63	-31	378	-31
By channel:
Direct finance (£m)	1,185	-18	3,245	-17	12,545	-25
Broker-introduced finance (£m)	556	-16	1,493	-14	5,438	-20
Sales finance (£m)	733	-6	2,241	-6	7,945	-17
By product:
Finance leasing (£m)	397	-9	1,014	-13	3,530	-21
Operating leasing (£m)	481	-20	1,416	-15	5,415	-22
Lease/Hire purchase (£m)	1,432	-12	3,907	-14	14,624	-25
Other finance (£m)	276	-18	902	2	3,400	-1