Kilkelly geraldine 400

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in December 2022 by 16% compared with the same month in 2021. In 2022 as a whole, new business was 6% higher than in 2021.

The plant and machinery finance and commercial vehicle finance sectors reported new business up in December by 6% and 7% respectively, compared with the same month in 2021. The business car finance sector reported new business 45% higher over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: "2022 was a year of two halves for the asset finance industry, with subdued new business growth of 1% in in the first half of the year followed by 12% growth in the second half. The strong double-digit growth seen in recent months has been driven by an easing of supply shortages, customers seeking to secure deals ahead of anticipated interest rate rises, and a surprise rebound in business investment.

“The industry’s support for SME investment in new equipment has been particularly strong, with a record level of asset finance new business provided to SMEs in 2022 of £22.5 billion.

“The strong performance, particularly in the final quarter of 2022, has boosted expectations for 2023, with 72% of asset finance respondents to the FLA’s Q1 2023 Industry Outlook Survey anticipating some new business growth over the next year, up from 47% in Q4 2022.

“The asset finance market funds as much as 40% of UK investment in machinery, equipment and vehicles and is helping businesses of all sizes as they strive to meet the Government’s net zero targets. We have called on the Chancellor to create a new green super-deduction capital tax allowance in the Spring 2023 Budget that includes leased assets or those acquired via short term rental so that the industry can support even more businesses to invest in greener assets.”

 Dec 2022

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Total FLA asset finance (£m)

3,208  16  8,976  15 33.752 6
Total excluding high value (£m) 3,075  21  8,643  19 31,719 7
Data Extracts:      
By asset:      

Plant and machinery finance (£m)

678 6 1,931 8 7,801 6
Commercial vehicle finance (£m) 733 7 2,323 9 8,797 5
IT equipment finance (£m) 181 24 356 8 1,568 -8
Business equipment finance (£m)  171  -21  485  -2  1,937 
Car finance (£m)  1,098  45  2,877 37 9,633 13
Aircraft, ships and rolling stock finance (£m) 28 154 69 53 350  4
By channel:       
Direct finance (£m)  1,479  38  4,034  34 13,924 8
Broker-introduced finance (£m) 652 14 1,934 14 7,414 10
Sales finance (£m) 945 4 2,675 4 10,381 2
By product:      
Finance leasing (£m) 373 20 948 15 3,393 5
Operating leasing (£m) 796 34 2,013 32 6,339 2
Lease/Hire purchase (£m) 1,578 15 4,798 13 19,067 10
Other finance (£m) 358 2 957 16 3,736 1

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