New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew by 3% in July 2021 compared with the same month in 2020. In the first seven months of 2021, new business was 24% higher than in the same period in 2020.

The business equipment finance and plant and machinery finance sectors reported new business up in July by 47% and 10% respectively, compared with the same month in 2020. Over the same period, new business in the IT equipment finance sector fell by 51%.

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

“Overall growth in the asset finance market slowed in July, but many asset sectors and new business channels continued to report robust recoveries.  New finance provided for agriculture and construction equipment each grew by 24% in July and annual new business in the broker and vendor finance channels has almost reached pre-pandemic levels. 

“The current shortage of assets available to finance – particularly in the automotive, machinery and electronic sectors – is weighing on the recovery of the industry and the wider economy.  Nevertheless, the rebound of the asset finance market so far this year demonstrates its underlying strength and points to further growth in the year ahead. 

“FLA members want to do even more to support businesses invest in the cleanest and most efficient plant and machinery.  We therefore continue to urge the Government to extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing.” 

 Note to editors:

1. In 2020, FLA members provided £113 billion of new finance to UK businesses and households.  £27 billion of finance was provided to businesses and the public sector. FLA members financed almost a third of UK investment in machinery, equipment and purchased software in the UK in 2020.
2. At the 2021 Budget, the Chancellor of the Exchequer announced a “super-deduction” for expenditure on qualifying plant and machinery assets. The measure hopes to boost investment by providing an allowance of 130% on new plant and machinery investments that would normally qualify for 18% main rate writing down allowance. The legislation as currently drafted excludes some of the most common ways plant and machinery is used by businesses, including leasing and plant hire. We propose that changes are made to the deduction so that it benefits a much broader range of businesses. The FLA and BVRLA joint briefing paper on Super Deduction can be found here.
3. For media enquiries, please contact the FLA press office on 020 7420 9656.