Asset finance market falls by 47% in April 2020

8 June 2020

New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 47% in April 2020 compared with the same month in 2019.  In the four months to April 2020, new business fell by 23% compared with the same period in 2019.

 The vehicle finance sectors reported the largest falls in April as new business in the commercial vehicle finance and business new car finance sectors contracted by 65% and 71% respectively, compared with April 2019.  Over the same period, the IT equipment finance and plant and machinery finance sectors reported falls in new business of 18% and 30% respectively.

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

 “The asset finance market continued to support businesses during the lockdown, fulfilling pipeline deals and demand from those sectors less affected by the lockdown measures such as agriculture and some manufacturing sectors. 

 “FLA asset finance members have a strong track record of supporting businesses through difficult times. To ensure that the industry can continue to do so, the Government needs to take immediate action to support all lenders, including non-bank lenders, by allowing them to access the Term Funding Scheme as the FLA has suggested in its Term Funding Pipeline proposal. This would allow the whole of the asset finance industry to support the huge demand for forbearance and meet demand for new finance as the economy reopens.”

 

Apr 2020

% change on prev. year

3 months to Apr

2020

% change on prev. year

12 months to Apr

2020

% change on prev. year

Total FLA asset finance (£m)

1,612

-47

6,624

-29

32,899

-6

Total excluding high value (£m)

1,537

-47

6,316

-28

30,512

-6

 

 

 

 

 

 

 

Data Extracts:

 

By asset:

 

 

 

 

 

 

Plant and machinery finance (£m)

431

-30

1,523

-18

6,814

-6

Commercial vehicle finance (£m)

305

-65

1,587

-38

8,194

-9

IT equipment finance (£m)

151

-18

603

3

2,859

1

Business equipment finance (£m)

104

-43

458

-23

2,234

-9

Car finance (£m)

422

-57

1,784

-34

9,058

-8

Aircraft, ships and rolling stock finance (£m)

20

-19

65

-57

530

35

 

By channel:

 

 

 

 

 

 

Direct finance (£m)

932

-40

3,170

-30

15,286

-7

Broker-introduced finance (£m)

274

-52

1,299

-27

6,320

-4

Sales finance (£m)

331

-59

1,847

-25

8,906

-6

 

By product:

 

 

 

 

 

 

Finance leasing (£m)

196

-49

854

-31

3,977

-11

Operating leasing (£m)

232

-64

1,237

-33

6,406

-8

Lease/Hire purchase (£m)

918

-48

3,605

-29

17,679

-7

Other finance (£m)

233

14

714

-10

3,510

8

 Note to editors:

  1. In 2019, FLA members provided £140 billion of new finance to UK businesses and households.  £36 billion of finance was provided to businesses and the public sector. FLA members financed more than a third of UK investment in machinery, equipment and purchased software in the UK in 2019.
  2. For media enquiries, please contact the FLA press office on 020 7420 9656.

 

 

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