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Business equipment providers cautiously optimistic about future investment as market continues to grow
New figures show that in the second quarter of 2011, asset finance providers lent more than £80 million pounds every day to businesses of all types and sizes, allowing them to invest in vital equipment.
And a new survey shows that asset finance looks set to continue to provide much-needed support for investment in business equipment, despite other more pessimistic economic indicators. The latest FLA market statistics show continued growth in asset finance across all business types.
The Finance & Leasing Association’s latest confidence survey1 found that, while asset finance lenders were less confident about the short-term outlook for the economy as a whole than they were three months ago, they were more confident that conditions in the equipment finance market would improve.
Last quarter, 21% of those surveyed expected an improvement in the equipment finance market in the following three months. This quarter the proportion has grown to 47%, despite a decline in optimism about general economic conditions. (Last quarter, 68% of respondents expected a slight improvement in the economy. This quarter only 1% expected to see economic improvement, 87% expected no change, and 11% foresaw a deterioration).
Cautious optimism about the asset finance markets is supported by the latest FLA statistics, which show that asset finance business for deals of up to £20 million grew by 7% in the second quarter of 2011 compared with Q2 2010. Growth was particularly strong in commercial vehicle finance (up 21%), general business equipment finance (up 16%) and was also seen in the plant and machinery sector (up 10%).
Commenting on the latest figures, George Lynn, Chief Financial Officer at Angel Trains and Chairman of the FLA’s Asset Finance Division, said:
“While several recent economic indicators have suggested low levels of business confidence, our recent survey of expectations in the asset finance market shows cautious optimism, which is supported by the continued growth in today’s Q2 figures.
“Asset finance providers, whether they work directly with businesses or through a broker or supplier, are finding more ways to help businesses of all sizes invest in the equipment they need to prosper and grow. Asset finance is giving businesses a boost just when they need it most.”
Table 1: Total asset finance business, and extracts of breakdown by asset class
|
| Jun 11 | % change | Q2 11 | % change | 12 months to Jun 2011 | % change |
| Business equipment finance (£m) | 197 | +11 | 481 | +16 | 1,945 | +19 |
| Car finance (£m) | 564 | +2 | 1,685 | +1 | 6,086 | +1 |
| IT equipment finance (£m) | 119 | +9 | 263 | +4 | 1,090 | -8 |
| Plant and machinery finance (£m) | 335 | +8 | 906 | +10 | 3,478 | +12 |
| Commercial vehicle finance (£m) | 383 | +20 | 1,035 | +21 | 3,879 | +16 |
| Aircraft, ships and rolling stock finance (£m) | 34 | -79 | 227 | -14 | 680 | -34 |
| Total excl. high value (£m) | 1,793 | +9 | 4,862 | +7 | 18,317 | +5 |
| Total FLA asset finance (£m) | 1,843 | -16 | 5,115 | -2 | 20,594 | +5 |
- ends -
Note to editors:
- The survey asked FLA members providing business finance about their expectations for the next three and 12 months.
- In 2010 FLA members provided £72.0 billion of new finance to UK businesses and households. £20.3 billion of finance was provided to businesses and the public sector, representing around a quarter of all fixed capital investment (excluding real property and own-account software) in the UK last year. £51.7 billion was in the form of consumer credit, representing a third of all unsecured lending in the UK. And £19.0 billion supported the purchase of more than half of private new car registrations in the UK.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993
.