Asset finance new business grew by 2% in June 2022

The commercial vehicle finance sector reported new business growth of 5% in June compared with the same month in 2021. Over the same period, the business equipment finance and plant and machinery finance sectors reported new business up by 9% and 3% respectively.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The asset finance market reported growth across many sectors in June, but overall growth remained modest as supply shortages continued to weigh on the recovery of the new car finance and IT equipment finance sectors.

“The first half of 2022 saw encouraging signs of improved demand for asset finance from SMEs as new lending to these businesses increased by 6% compared with the same period in 2021. Annual asset finance new business to SMEs in June reached £20.6 billion, 1% higher than its pre-pandemic peak.

“Business investment is likely to remain weak in the second half of 2022 as the impact of higher inflation, interest rates, and taxes hit consumer spending and business margins. Our Q3 2022 industry outlook survey suggests 62% of asset finance respondents expect growth in new business over the next year, down from 76% in the Q2 2022 survey.

“Nevertheless, the industry remains optimistic about the opportunities for growth and, in particular, about the vital role it will play in supporting businesses of all sizes to invest in greener technology and to meet net zero targets set by the Government.”