News
Asset finance supports growth in manufacturing investment
The latest figures from the Finance & Leasing Association show asset finance for investment in plant and machinery grew in Q1 2012 by 26% compared with Q1 2011.
The figures reinforce the findings of a recent report by the manufacturing organisation EEF, “Financing for Assets”1. 86% of its members who used external finance had invested in equipment through asset finance in the last three years. A similar percentage of manufacturers expected to use it in the next three years.
The Government’s National Loans Guarantee Scheme included asset finance and the FLA hopes it will also be a key feature of the Government’s Business Finance Partnership2.
The FLA’s latest figures also show that asset finance for cars, commercial vehicles and IT equipment grew in the first quarter of 2012 compared with the same period last year.
Geraldine Kilkelly, Chief Economist and Head of Research at the Finance & Leasing Association, commented:
“The sustained growth in asset finance meant that the percentage of fixed capital investment3 financed by the industry rose from 24% in 2010 to 27% in 2011. The recent EEF Report shows the importance of asset finance in supporting manufacturing investment. There is clear evidence that asset finance can make a significant contribution to the UK’s economic recovery.”
Table 1: Total asset finance business, and extracts of breakdown by asset class
|
| Mar 2012 | % change on Mar 2011 | Q1 2012 | % change on prev. year | 12 months to Mar 2012 | % change on prev. year |
| Plant and machinery finance (£m) | 453 | +17 | 1,088 | +26 | 4,061 | +16 |
| Commercial vehicle finance (£m) | 492 | +8 | 1,238 | +16 | 4,533 | +19 |
| IT equipment finance (£m) | 132 | +29 | 283 | +18 | 1,189 | +10 |
| Business equipment finance (£m) | 195 | -9 | 513 | -2 | 2,026 | +7 |
| Car finance (£m) | 677 | -4 | 1,503 | +5 | 6,337 | +5 |
| Aircraft, ships and rolling stock finance (£m) | 13 | -62 | 95 | -18 | 534 | -32 |
| Total excl. high value (£m) | 2,108 | +4 | 5,076 | +13 | 20,156 | +11 |
| Total FLA asset finance (£m) | 2,151 | +3 | 5,294 | +8 | 21,256 | +1 |
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Note to editors:
1. The EEF report referenced was a survey into the equipment acquisition and finance decisions of their manufacturing member companies, released in May 2012 and available to download here.
2. The National Loan Guarantee offers a discount on new term loans, hire purchase and leasing agreements. In his Autumn Budget Statement the Chancellor announced that the Government would set up a Business Finance Partnership to make available £1bn for investment through non-bank lending channels.
3. Excluding property and own-account software.
4. In 2011, FLA members provided £72.9 billion of new finance to UK businesses and households. £20.8 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:
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk
M: 07918 766 993
.