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Asset finance to boost Chancellor's small business investment plans
The Finance & Leasing Association (FLA) has responded positively to the Government’s announcement that it is exploring alternative finance options to help small business investment.
Stephen Sklaroff, Director General of the FLA said:
“We are pleased to see from the Chancellor’s Autumn Statement that the Government’s credit-easing programme – and in particular the new Business Finance Partnership – will cover alternative sources of finance for small and medium-sized businesses, including those provided by non-banks.
“We will be working with the Treasury over the next few weeks on specific proposals aimed at helping more small and medium-sized businesses to invest in new equipment using asset finance (leasing and hire purchase).”
The FLA is discussing with the Treasury a scheme that could, over 12 months, channel up to £1 billion of additional investment finance to UK SMEs using existing asset finance delivery channels.1
In the third quarter of this year alone, £5 billion of funding was provided to Britain’s businesses via asset finance. Funding for business equipment, plant and machinery and IT equipment all increased compared to the same period last year (see table below).
Table 1: Total asset finance business, and extracts of breakdown by asset class
|
| Sep 11 | % change | Q3 11 | % change | 12 months to Sep 2011 | % change |
| Business equipment finance (£m) | 159 | -10 | 461 | +3 | 1,958 | +17 |
| Car finance (£m) | 625 | +14 | 1,616 | +7 | 6,203 | +3 |
| IT equipment finance (£m) | 124 | +35 | 289 | +2 | 1,095 | -1 |
| Plant and machinery finance (£m) | 331 | -15 | 960 | +3 | 3,510 | +7 |
| Commercial vehicle finance (£m) | 435 | +32 | 1,062 | +28 | 4,170 | +24 |
| Aircraft, ships and rolling stock finance (£m) | 20 | -19 | 66 | -66 | 550 | -42 |
| Total excl. high value (£m) | 1,889 | +10 | 4,970 | +11 | 18,859 | +8 |
| Total FLA asset finance (£m) | 2,003 | +4 | 5,164 | +5 | 20,928 | +8 |
- ends -
Note to editors:
- In The Autumn Statement 2011 the Government says it will ‘make available an initial £1bn through a Business Finance Partnership, which will invest in smaller and mid-sized businesses in the UK through non-bank channels’.
- Last year, 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.
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 766993