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Asset finance industry funds 32% of UK business investment

9 October 2015

Figures released today by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase) grew by 5% in August compared with the same month last year – the twenty-third consecutive month of growth.

August saw strong growth in new finance provided for IT equipment and commercial vehicles, up by 81% and 15% respectively compared with August 2014.

Following revisions to official business investment data published by the Office for National Statistics (ONS), the percentage of UK investment in machinery, equipment and purchased software financed by the asset finance industry has been revised up to 32.0% in the twelve months to June 2015.

Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:

“The revised ONS business investment figures show that the industry’s contribution to the funding of investment is much greater than previous data suggested. The percentage of UK investment in machinery, equipment and software has grown from a low of just over a quarter in 2010 to almost a third in the year to June 2015.”

Aug

2015

% change on prev. year

3 months to Aug 2015

% change on prev. year

12 months to Aug 2015

% change on prev. year

Total FLA asset finance (£m)

1,876

+5

7,025

+10

28,286

+14

Total excluding high value (£m)

1,829

+2

6,862

+9

27,231

+13

Data Extracts:

 

By asset:

Plant and machinery finance (£m)

421

-1

1,497

+3

5,717

+13

Commercial vehicle finance (£m)

440

+15

1,576

+15

6,495

+10

IT equipment finance (£m)

195

+81

605

+46

2,080

+40

Business equipment finance (£m)

150

+8

521

-6

2,179

+7

Car finance (£m)

498

-12

2,118

+5

8,736

+14

Aircraft, ships and rolling stock finance (£m)

28

+119

54

+29

462

+68

 

By channel:

Direct finance (£m)

944

-1

3,399

+8

13,651

+17

Broker-introduced finance (£m)

336

+2

1,224

+8

4,864

+10

Sales finance (£m)

549

+8

2,239

+13

8,717

+8

 

By product:

Finance leasing (£m)

227

+7

851

+12

3,655

+5

Operating leasing (£m)

441

+13

1,571

+12

6,426

+8

Lease/Hire purchase (£m)

1,019

+5

3,720

+10

14,593

+16

Other finance (£m)

189

-11

884

+3

3,612

+28

Note to editors:

  1. In 2014, FLA members provided £100 billion of new finance to UK businesses and households. £26 billion of finance was provided to businesses and the public sector. FLA members financed more than 30% of UK investment in machinery, equipment and purchased software in the UK last year.