New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in November 2021 by 5% compared with the same month in 2020. In the eleven months to November 2021, new business was 16% higher than in the same period in 2020.

The plant and machinery finance and commercial vehicle finance sectors reported new business up in November by 35% and 7% respectively, compared with the same month in 2020. By contrast, the business equipment finance and IT equipment finance sectors reported falls in new business of 14% and 50% respectively, over the same period.

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

“The asset finance market returned to growth in November with new finance provided to SMEs up by 21% compared with the same month in 2020. New business in 2021 as a whole is likely to be £31 billion, 13% lower than the pre-pandemic peak as disruption caused by equipment shortages and the broader economic impacts of new waves of Covid-19 slow the rate of recovery.

“The industry has remained resilient during the pandemic and continues to support businesses of all sizes to invest in a more sustainable future. Our latest research suggests that FLA members financed almost 40% of UK investment in machinery, equipment and purchased software in Q3 2021, the highest rate since Q2 2019.

“We continue to urge the Government to extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing so the industry can support more businesses to recover and grow.”

 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.