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.”
UK Asset Finance Market 2019
|Dec 2019||% change on
|3 months to
|% change on
|12 months to
|% change on
|Total FLA asset finance (£m)||2,943||1||8,679||1||35,653||6|
|Total excluding high value (£m)||2,605||0||7,970||0||33,008||5|
|Plant and machinery finance (£m)||530||-22||1,677||-9||7,320||5|
|Commercial vehicle finance (£m)||693||-2||2,186||-7||9,136||9|
|IT equipment finance (£m)||376||10||840||25||2,830||3|
|Business equipment finance (£m)||231||2||603||-9||2,465||-2|
|Car finance (£m)||754||8||2,382||4||9,998||4|
|Aircraft, ships and rolling stock finance (£m)||35||17||116||-5||566||88|
|Direct finance (£m)||1,279||-5||3,987||-1||16,680||5|
|Broker-introduced finance (£m)||522||1||1,689||1||6,782||9|
|Sales finance (£m)||804||7||2,294||1||9,546||2|
|Finance leasing (£m)||339||-15||1,088||-8||4,378||3|
|Operating leasing (£m)||640||7||1,815||1||6,984||1|
|Lease/Hire purchase (£m)||1,458||-5||4,476||-4||19,305||6|
|Other finance (£m)||336||35||930||44||3,587||18|
Written by John Maslen
Source: Asset Finance International