Asset finance new business grows by 13%

17th May 2022

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in March 2022 by 13% compared with the same month in 2021. In Q1 2022 as a whole, new business was 7% higher than in the same quarter in 2021.

The IT equipment finance and business equipment finance sectors reported new business up in March by 73% and 29% respectively, compared with the same month in 2021. Over the same period, the plant and machinery finance sector reported new business growth of 14%.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “In March, the asset finance market reported its strongest performance for three years as the monthly new business total reached more than £3.6 billion.  Finance for high value projects boosted growth with new lending to large corporates up by 21%.  New lending to SMEs was also strong, increasing by 10% compared with March 2021.”

“The UK economic outlook has weakened significantly because of the squeeze on profit margins and household incomes from higher inflation. Despite this, business investment is expected to rebound this year and our latest figures demonstrate that asset finance remains business critical for many companies during a period of heightened uncertainty.”

“With the asset finance industry financing as much as 40% of UK investment in machinery and equipment, we urge the Government to include leasing in the reformed capital allowance regime it is planning. This will allow the industry to support more businesses to grow.”

Mar

 2022

% change on prev. year

3 months to

Mar 2022

% change on prev. year

12 months to

Mar 2022

% change on prev. year

Total FLA asset finance (£m)

3,649

13

8,189

7

31,864

16

Total excluding high value (£m)

3,116

3

7,276

4

29,552

15

Data Extracts:

 

By asset:

Plant and machinery finance (£m)

753

14

1,822

6

7,435

23

Commercial vehicle finance (£m)

892

2

2,106

3

8,439

18

IT equipment finance (£m)

342

73

506

-4

1,674

-29

Business equipment finance (£m)

239

29

511

19

1,970

17

Car finance (£m)

968

6

2,167

11

8,718

22

Aircraft, ships and rolling stock finance (£m)

24

-3

136

70

393

27

 

By channel:

Direct finance (£m)

1,203

-3

2,996

-3

12,478

4

Broker-introduced finance (£m)

739

6

1,720

8

6,742

23

Sales finance (£m)

1,175

10

2,560

11

10,332

27

 

By product:

Finance leasing (£m)

392

13

818

-2

3,204

-6

Operating leasing (£m)

623

-5

1,408

-5

6,151

17

Lease/Hire purchase (£m)

2,037

16

4,620

13

17,763

22

Other finance (£m)

442

38

1,040

15

3,453

2