New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in September 2023 by 6% compared with the same month in 2022. In the nine months to September 2023, new business was 14% higher than in the same period in 2022.
The business new car finance and commercial vehicle finance sectors reported new business up in September by 49% and 12% respectively, compared with the same month in 2022. The plant and machinery finance sector reported a fall in new business of 22% over the same period.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:
“The asset finance continued to report growth in September albeit at its slowest rate since July 2022. The vehicle finance sectors reported further robust growth, but the machinery and equipment finance sectors recorded lower levels of new business. September saw new lending to SMEs fall by 3% compared with the same month in the previous year, the first contraction since April 2022. By contrast, new business to larger businesses increased by 24%.
“The economic outlook has weakened following a sustained period of high inflation and higher interest rates. Nevertheless, FLA asset finance providers remain optimistic about growth opportunities as shown by the FLA’s Q3 2023 Industry Outlook Survey. Respondents identified a range of opportunities from the development of new products, diversification into new sectors, and through supporting businesses to transition to net zero.
“The FLA has called on the Government to recognize the vital role the asset finance industry plays in support business investment by extending the full expensing regime to include leasing and rental in the Autumn Statement.”
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