Asset finance market fell by 16% in January

15th March 2021

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 16% in January 2021 compared with the same month in 2020.

The plant and machinery finance sector reported a fall in new business of 3% in January compared with the same month in 2020.  The IT equipment finance and business equipment finance sectors reported falls in new business of 32% and 30% respectively, over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “The asset finance market provided more than £2.1 billion of new finance to businesses in January despite the ongoing restrictions in response to the Covid-19 pandemic.  Several sectors – agriculture, printing equipment, machine tools – reported higher levels of new business than in January 2020.”

“If the UK economy is going to improve its long-term growth potential, there needs to be a significant increase in investment by businesses that enhances productivity and builds a sustainable future.  With as much as 40% of equipment investment funded by FLA members, the asset finance market will play a vital role in helping businesses achieve these goals.”

Jan 2021

% change on prev. year

3 months to Jan 2021

% change on prev. year

12 months to Jan 2021

% change on prev. year

Total FLA asset finance (£m)

2,124

-16

7,268

-11

26,934

-24

Total excluding high value (£m)

1,919

-18

6,749

-9

25,245

-23

Data Extracts:

 

By asset:

Plant and machinery finance (£m)

464

-3

1,437

-7

5,858

-18

Commercial vehicle finance (£m)

552

-12

1,964

-3

6,943

-24

IT equipment finance (£m)

153

-32

603

-27

2,421

-15

Business equipment finance (£m)

117

-30

452

-21

1,719

-26

Car finance (£m)

579

-16

1,996

-8

7,114

-29

Aircraft, ships and rolling stock finance (£m)

39

-44

69

-49

313

-49

 

By channel:

Direct finance (£m)

887

-25

3,192

-14

12,000

-28

Broker-introduced finance (£m)

413

-16

1,440

-5

5,355

-21

Sales finance (£m)

618

-5

2,117

-2

7,890

-17

 

By product:

Finance leasing (£m)

249

-6

860

-6

3,474

-20

Operating leasing (£m)

426

-17

1,496

-13

5,182

-26

Lease/Hire purchase (£m)

1,162

-11

3,856

-7

14,308

-25

Other finance (£m)

235

-37

726

-25

3,156

-12