Asset finance new business up 9%

New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in May 2024 by 9% compared with the same month in 2023.  In the five months to May 2024, new business was 8% higher than in the same period in 2023.

The business new car finance and commercial vehicle finance sectors reported new business up in May by 12% and 8% respectively, compared with the same month in 2023.  Over the same period, new business in the plant and machinery finance and business equipment finance sectors fell by 2% and 11% respectively.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The asset finance market has grown in all but one month so far this year, with the annual total of new business in May reaching a new high of almost £40 billion.  The performance across sectors has varied in line with what was seen for much of 2023 – continued growth in vehicle finance but subdued demand for machinery and business equipment finance.

“Demand from larger businesses has driven growth in the first five months of 2024 as new business increased by 14%, while new lending to SMEs increased by only 3%.  

“We welcome the new Government’s commitment to providing economic stability and laying the foundations to boost growth and, in particular, business investment.  The asset finance industry will play a vital in supporting businesses to invest to grow and to meet net zero targets, funding as much as 40% of UK investment in machinery, equipment and vehicles.”

	May  2024	% change on prev. year	3 months to May 2024	% change on prev. year	12 months to May 2024	% change on prev. year
Total FLA asset finance (£m)	3,414	9	11,041	7	39,703	10
Total excluding high value (£m)	3,268	10	10,455	7	37,893	10
Data extracts:   By asset:
Plant and machinery finance (£m)	642	-2	2,078	-8	7,406	-11
Commercial vehicle finance (£m)	867	8	2,980	14	10,399	11
IT equipment finance (£m)	142	107	358	23	1,251	-7
Business equipment finance (£m)	128	-11	431	-12	1,813	-5
Car finance (£m)	1,130	8	3,705	9	13,891	26
Aircraft, ships and rolling stock finance (£m)	15	-20	104	24	348	11
By channel:
Direct finance (£m)	1,406	5	4,657	7	17,394	12
Broker-introduced finance (£m)	796	12	2,325	1	8,431	3
Sales finance (£m)	1,066	16	3,473	10	12,067	11
By product:
Finance leasing (£m)	269	19	816	0	3,457	2
Operating leasing (£m)	908	26	2,729	17	9,984	31
Lease/Hire purchase (£m)	1,780	3	5,916	4	20,682	3
Other finance (£m)	316	-5	1,219	16	4,266	13