Asset finance new business grew by 16% in December 2022

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.”