New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 41% in June 2020 compared with the same month in 2019.  In the first half of 2020, new business fell by 32% compared with the same period in 2019.

The business new car finance and commercial vehicle finance sectors reported falls in new business in June 2020 of 55% and 44% respectively, compared with the same month in 2019.  Over the same period, the business equipment finance and plant and machinery finance sectors reported falls in new business of 36% and 28% respectively.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said “The asset finance market provided almost £2 billion of new business in June, up from a crisis-low of only £1.2 billion in May. The quarter end month of June is traditionally a strong month for the industry, and with many businesses closed or operating well below capacity, it is not surprising that new business was more than 40% lower than in June 2019.”

“The outlook for the economy remains uncertain, with the industry facing a prolonged period of providing forbearance as a result of the crisis. We continue to urge the Government and Bank of England to take action that ensures support for all lenders, including non-bank lenders, so that they can meet the demand for forbearance and pent-up demand for finance to invest in new equipment.”

Jun 2020

% change on prev. year

3 months to Jun

2020

% change on prev. year

12 months to Jun

2020

% change on prev. year

Total FLA asset finance (£m)

1,989

-41

4,795

-49

29,715

-15

Total excluding high value (£m)

1,840

-37

4,475

-49

27,672

-15

Data Extracts:

 

By asset:

Plant and machinery finance (£m)

452

-28

1,252

-34

6,363

-13

Commercial vehicle finance (£m)

481

-44

1,077

-57

7,364

-20

IT equipment finance (£m)

226

-14

547

-12

2,817

3

Business equipment finance (£m)

119

-36

335

-40

2,038

-15

Car finance (£m)

452

-51

1,026

-64

7,835

-21

Aircraft, ships and rolling stock finance (£m)

31

-71

75

-62

415

-19

 

By channel:

Direct finance (£m)

814

-45

2,268

-49

13,704

-17

Broker-introduced finance (£m)

398

-30

911

-48

5,772

-14

Sales finance (£m)

628

-26

1,295

-48

8,196

-13

 

By product:

Finance leasing (£m)

268

-24

638

-40

3,743

-16

Operating leasing (£m)

390

-33

761

-58

5,768

-17

Lease/Hire purchase (£m)

1,001

-44

2,621

-50

15,844

-17

Other finance (£m)

231

-38

630

-24

3,277

0