News
Leasing grows in popularity for business investment
New figures from the Finance & Leasing Association (FLA) show that the popularity of business finance as a means of financing investment in new business equipment has grown significantly.
Overall, asset finance (leasing and hire purchase) new business grew in November 2011 by 29% compared with the previous year, to reach almost £1.9 billion. This was the third largest monthly total recorded in 2011. In the eleven months to November 2011, new business grew by 3% to £18.7 billion. For deals of up to £20 million, new business was up 9% over the same period.
There was growth across all major asset categories. The strongest rate of growth was reported in business equipment finance, which was 37% higher in November than in the same month in 2010. Over the same period, plant and machinery finance grew by 21%, commercial vehicle finance by 15%, and business car finance by 13%.
The broker market also showed strong growth – broker-sourced new business was up by 12% in November compared with the same month a year earlier.
Commenting on the figures, Julian Rose, Head of Asset Finance at the FLA, said:
“Our latest figures show that businesses large and small are using asset finance as an affordable way to buy or rent new equipment. Around a thousand new finance contracts are signed each day. Our members are actively supporting the UK’s economic growth by helping firms to invest in new equipment to allow them to grow their businesses and protect or create jobs.”
- ends -
Note to editors:
- FLA members provide around £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.
- Asset finance (mainly leasing and hire purchase) allows small businesses to invest in equipment or vehicles without having to use their own capital. It enables businesses to spread the cost of their equipment over time, and is often available when traditional bank loans are difficult to obtain. Under a leasing agreement, the leasing company buys and owns the asset.
- Asset finance accounts for a quarter of all UK fixed capital investment. It is used by around 1 in 3 small businesses with any external borrowing. Around 750,000 small businesses currently rely on it. More than 1,000 UK businesses enter into a new asset finance contract every day.
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