Optimism continues to grow in Asset Finance sector

5 September 2013

New figures released today by the Finance & Leasing Association (FLA) show that, new business deals of up to £20 million grew by 6% during July, consistent with the positive outlook reported in the FLA’s Asset Finance Confidence Survey. It was a good month for the business equipment finance sector which reported double-digit growth of 11%. Sales finance was also up in July, with new business growing by 17%, and commercial vehicle finance grew by 16%, the highest rate for more than a year.

Commenting, Julian Rose, Head of Asset Finance at the FLA said: “This further month of growth in the use of asset finance is in line with several recent surveys including the SME Finance Monitor, which reported a spike in the use of asset finance by small businesses. The Department for Business’s SME Business Barometer found that, for the first time for nearly two years, the main reason for SMEs seeking external finance was to acquire new equipment. The industry is optimistic about its ability to continue to serve more businesses, but our Asset Finance Regulation and Compliance Conference next week will consider how to ensure that a range of new accounting and financial sector regulation do not make it harder to sustain growth.”

  July 2013 % change on July 2012 3 months to July 2013 % change on prev. year 12 months to July 2013 % change on prev. year
Total FLA asset finance (£m) 1,874 +3 5,766 +3 21,488 -1
Total leasing and hire purchase excluding high value (£m) 1,873 +6 5,612 +4 20,876 +1
Data Extracts:            
Plant and machinery finance (£m) 399 +3 1,219 +8 4,303 +2
Commercial vehicle finance (£m) 393 +16 1,244 +12 4,680 0
IT equipment finance (£m) 96 -8 448 +21 1,461 +9
Business equipment finance (£m) 151 +11 534 +15 1,879 -5
Car finance (£m) 628 +5 1,784 -4 6,715 +3
Aircraft, ships and rolling stock finance (£m) 24 -57 54 -45 439 +19

Note to editors:

  1. In 2012 FLA members provided £76.6 billion of new finance to UK businesses and households.  £21.5 billion of finance was provided to businesses and the public sector, representing around 28% of all fixed capital investment (excluding real property and own-account software) in the UK last year.
  2. BDRC SME Finance Monitor quarterly survey published last week and reported 9% of SMEs were using asset finance in Q2 2013, the highest level since the survey started in 2011 (page 46). 23% of businesses seeking any form of finance considered the use of asset finance in Q2 2013, up from 21% in the previous quarter and from 18% when the survey started in 2011 (page 210).
  3. The SME Business Barometer of BIS, published on 27 August. For most of the Barometer series, the main reason for seeking finance has been to secure working capital. In June 2013, for the first time since February 2011, purchase of equipment or vehicles overtakes working capital as the main reason for seeking finance (see page 45).
  4. The FLA’s asset finance confidence survey published last week.

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