News
First growth in asset finance since September 2008
June this year saw growth in new asset finance (leasing and hire purchase), including commercial vehicles and other business equipment, for the first time since September 2008.
According to new figures from the Finance & Leasing Association (FLA) business investment through asset finance increased 26% in June, compared to the same month last year. This suggests that business confidence is showing the first signs of recovery, but the growth is from a low base because the decline in investment over the last two years was greater and more rapid than in previous recessions.
FLA members provided more than £2 billion of business finance for equipment ranging from computers and telecoms systems to white vans and forklift trucks in June. Commercial vehicle and business equipment finance grew by 13% and 25% respectively compared to June 2009.
Commenting on the statistics, Julian Rose, Head of Asset Finance at the FLA, said:
“Any sign of growth is good news, but the severity of the drop in business investment during the recession means that a return to pre-crunch levels is still a long way off. In the meantime many businesses are living in a Rusting Britain, with equipment that doesn’t meet their needs for the recovery.
“We believe the Government could do more to help businesses to invest by streamlining accounting and taxation regulation and by extending its programme of small business loans risk support to include asset finance. This would build on the Government’s recognition of the importance of asset finance in its ‘Financing a Private Sector Recovery’ Green Paper.”
Table 1: Total asset finance business, and extracts of breakdown by asset class
| Jun 10 | % change | Q2 10 | % change | 12 months to Jun 10 | % change | |
| Business equipment finance (£m) | 134 | +25 | 327 | +3 | 1,328 | -22 |
| Car finance (£m) | 510 | +21 | 1,526 | +20 | 5,568 | +1 |
| IT equipment finance (£m) | 114 | -14 | 257 | -10 | 1,175 | -11 |
| Plant and machinery finance (£m) | 256 | -24 | 673 | -7 | 2,548 | -30 |
| Commercial vehicle finance (£m) | 307 | +13 | 819 | 0 | 3,202 | -18 |
| Aircraft, ships and rolling stock finance (£m) | 168 | +38 | 268 | -27 | 1,035 | -38 |
| Total excl. high value (£m) | 1,491 | +19 | 4,074 | +7 | 15,797 | -13 |
| Total FLA asset finance (£m) | 2,053 | +26 | 4,785 | +2 | 18,002 | -24 |
- ends -
Note to editors:
In 2009 FLA members provided £72.5 billion of new finance to UK businesses and households. Almost £19.3 billion of finance was provided to businesses and the public sector, representing around a quarter of all fixed capital investment in the UK last year. £53.2 billion was in the form of consumer credit, including a third of all unsecured lending in the UK. And £16.5 billion supported the purchase of half of new car registrations in the UK.
For further media information, please contact:
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766993