Record levels of asset finance new business reported by UK’s FLA members

Carl D’Ammassa, group managing director of business finance at Aldermore (pictured above), said: “The FLA’s latest statistics highlight that the asset finance sector as a whole continues to show strong growth, with new business increasing by 10% since March last year – the highest level on record.

“This continues the trend of a steady increase in the number of businesses and consumers using asset finance since September 2013, and highlights the important role the industry plays in supporting economic growth.

“This quarter’s growth was driven by the motor sector in particular, which continued to show very strong new business growth of 9% compared to Q1 2015. The IT equipment finance and business equipment finance sectors also saw impressive growth, with new business up by 29% (to £260 million) and 11% (to £226 million) respectively year-on-year.”

D’Ammassa added: “Interestingly, new business deals of up to £20 million saw an increase of 5% compared with last year, a trend we have seen reflected on our books at Aldermore, where there has been an increase in larger deals.

“New business sourced through brokers also saw strong gains of 11% compared to March 2015, especially in vendor finance. This shows the need for those in the lending industry to continue strengthening relationships with intermediaries and brokers, something we have placed particular focus on at Aldermore this year.

“The quarter ahead is likely to be more challenging, with market turmoil and uncertainty predicted around the upcoming EU referendum. For this reason, it’s even more telling that asset finance is continuing to grow despite a drop in business confidence.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “March saw the asset finance market report its highest level of monthly new business on record. Growth was broad-based with the exception of a fall in new finance for plant and machinery. The slowdown in this sector reflects the apparent weakness of the industrial sector reported in the latest national statistics.”