11 October 2021
New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew by 6% in August 2021 compared with the same month in 2020. In the eight months to August 2021, new business was 22% higher than in the same period in 2020.
The commercial vehicle finance sector reported new business up by 15% in August compared with the same month in 2020. Over the same period, the business equipment finance and plant and machinery finance sectors each reported new business growth of 12%.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:
“The asset finance market reported its seventh consecutive month of new business growth in August, despite some sectors continuing to experience supply shortages of assets to finance.
“Our latest research demonstrates the huge economic contribution that the asset finance industry makes by supporting businesses as they recover from the pandemic – more than 40% of UK investment in machinery, equipment and purchased software was funded by FLA members in the second quarter of 2021.
“We therefore 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.”
Aug 2021 |
% change on prev. year |
3 months to Aug 2021 |
% change on prev. year |
12 months to Aug 2021 |
% change on prev. year |
|
Total FLA asset finance (£m) |
2,212 |
6 |
7,644 |
16 |
31,254 |
9 |
Total excluding high value (£m) |
2,134 |
10 |
7,213 |
19 |
29,357 |
10 |
|
|
|
|
|
|
|
Data Extracts:
By asset: |
|
|
|
|
|
|
Plant and machinery finance (£m) |
555 |
12 |
1,901 |
23 |
6,892 |
11 |
Commercial vehicle finance (£m) |
622 |
15 |
2,071 |
26 |
8,413 |
19 |
IT equipment finance (£m) |
136 |
-21 |
419 |
-37 |
2,021 |
-28 |
Business equipment finance (£m) |
139 |
12 |
474 |
31 |
1,856 |
-1 |
Car finance (£m) |
563 |
4 |
2,074 |
26 |
8,590 |
15 |
Aircraft, ships and rolling stock finance (£m) |
39 |
82 |
74 |
-35 |
348 |
-15 |
By channel: |
|
|
|
|
|
|
Direct finance (£m) |
941 |
5 |
3,006 |
9 |
13,011 |
1 |
Broker-introduced finance (£m) |
532 |
27 |
1,706 |
30 |
6,637 |
19 |
Sales finance (£m) |
660 |
6 |
2,502 |
25 |
9,708 |
19 |
By product: |
|
|
|
|
|
|
Finance leasing (£m) |
220 |
-18 |
776 |
-8 |
3,472 |
-5 |
Operating leasing (£m) |
427 |
8 |
1,495 |
15 |
6,131 |
10 |
Lease/Hire purchase (£m) |
1,309 |
25 |
4,316 |
32 |
17,102 |
14 |
Other finance (£m) |
188 |
-44 |
740 |
-26 |
3,351 |
-4 |
Note to editors:
- 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.
- 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.
- For media enquiries, please contact the FLA press office on 020 7420 9656.