Asset finance market reaches record level in UK during 2019
The UK asset finance market reached record levels last year as demand grew 6%, according to the Finance & Leasing Association (FLA).
Latest FLA figures show that total asset finance new business (primarily leasing and hire purchase) reached a record level of £35.7 billion.
In the final month of the year, business only grew by 1% compared to December 2018, but the record was secured by strong performances earlier in the year.
During December 2019, the IT equipment finance sector continued to report double-digit growth as new business increased by 10% compared with the same month in 2018.
By contrast, the commercial vehicle finance and plant and machinery finance sectors reported falls in new business of 2% and 22% respectively, over the same period, potentially reflecting uncertainty as companies waited for the results of a general election and future clarity on Brexit.
In 2019 as a whole, the commercial vehicle finance and plant and machinery finance sectors reported the strongest growth rates, with new business up by 9% and 5% respectively, compared with 2018.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance industry reached a record level of new business in 2019, despite continued weakness in business investment. Within the overall total, more than £20 billion went to SMEs to fund investment in machinery and equipment, 4% higher than in 2018.
“Key industry sectors benefitted from using asset finance last year, with double-digit growth in new finance provided for construction and manufacturing equipment.”