Asset finance new business grew by 8% in January 2023

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in January 2023 by 8% compared with the same month in 2022. In the twelve months to January 2023, new business was 6% higher than in the same period in 2022.

The commercial vehicle finance and business new car finance sectors reported new business up in January by 9% and 57% respectively, compared with the same month in 2022. The plant and machinery finance sector reported new business 3% lower over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The asset finance industry made a positive start to 2023, recording its ninth consecutive month of growth. The strong performance of the vehicle finance sectors reflected an easing of supply shortages. The latest figures suggest that demand for asset finance from SMEs remained robust, increasing by 13% compared with January 2022.

“The asset finance industry funds as much as 40% of investment in machinery, equipment and vehicles by businesses across the UK. We urge the Chancellor to recognize the importance of the industry in supporting business investment and improving productivity by ensuring that any new capital allowances regime includes leased assets or those acquired via short term rental.”

	Jan 23	% change on prev yr	3 mths to Jan 23	% change on prev yr	12 mths to Jan 23	% change on prev yr
Total FLA asset finance (£m)	2,628	8	8,677	12	33,938	6
Total excluding high value (£m)	2,514	16	8,329	17	32,072	7
Data Extracts:
By asset:
Plant and machinery finance (£m)	504	-3	1,773	0	7,785	5
Commercial vehicle finance (£m)	686	9	2,231	9	8,854	4
IT equipment finance (£m)	81	-1	361	19	1,567	-3
Business equipment finance (£m)	123	1	450	-6	1,938	2
Car finance (£m)	897	40	2,884	40	9,890	16
Aircraft, ships and rolling stock finance (£m)	38	-56	97	-10	301	-22
By channel:
Direct finance (£m)	1,250	31	3,943	32	14,222	11
Broker-introduced finance (£m)	561	17	1,845	15	7,495	11
Sales finance (£m)	703	-3	2,541	2	10,356	1
By product:
Finance leasing (£m)	243	14	14,893	17	3,423	7
Operating leasing (£m)	605	50	2,026	37	6,542	6
Lease/Hire purchase (£m)	1,412	4	4,566	8	19,123	9
Other finance (£m)	301	-22	943	-1	3,651	-4