Figures released by the Finance & Leasing Association (FLA) today shows that asset finance new business (primarily leasing and hire purchase) grew by 7% in April, compared with the same month in 2017.
Business in the plant and machinery finance and business equipment finance sectors was up by 13% to £574m and by 18% to £206m respectively, while commercial vehicle finance new business increased by 13% over the same period. This is welcome news for the industry, which recorded a 9% fall year-on-year in March.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The recovery in asset finance new business in April was broad-based. The manufacturing, agricultural and construction equipment finance sectors each reported strong growth, with new business up by 61%, 35% and 27% respectively, compared with April 2017.”
The total asset finance of the FLA in April was £2.73bn, a 7% increase on the same point last year. In the three months to April there remains a 1% decline over the same period in 2017. There has also been a 20% drop in operating leasing product, down to £476m.
Broker-introduced finance rose by 24% year-on-year to £525m. All channels of finance showed improvement, with direct finance and sales finance increasing by 3% and 14% respectively.
In 2017, FLA members provided £128bn of new finance to UK businesses and households. Last year FLA members financed more than a third of UK investment in machinery, equipment and purchased software.
April’s figures show an overall significant improvement from March, when asset finance recorded a 5% year-on-year fall. The current figures may signify promising signs of a UK economy recovering from a slump, though this trend would need to continue and improve into the next quarter for this assertion to be justified.