Asset finance new business reached record levels in 2017 following growth of 5% during the year, according to the latest figures from the UK’s Finance & Leasing Association (FLA).
The sector achieved its seventh consecutive year of growth, with new business levels reaching almost £32 billion last year.
The plant and machinery finance and commercial vehicle finance sectors reported new business up in 2017 by 12% and 1% respectively, compared with 2016, while new finance for business equipment was up by 7% over the same period.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance industry reported a record level of new business of almost £32 billion in 2017, despite challenging economic conditions and subdued business investment growth.
“The latest figures also reveal that asset finance is a vital source of funding for SMEs when investing in business equipment and machinery. Of the total asset finance new business in 2017, £18.6 billion went to SMEs – 12% higher than in 2016.”
During 2017, FLA members provided £128 billion of new finance to UK businesses and households, with £32 billion of finance provided to businesses and the public sector.
FLA members financed more than one-third of UK investment in machinery, equipment and purchased software in the UK last year.
UK asset finance market 2017
|Dec17||% change on
|3 mths to
|% change on
|12 mths to
|% change on
|Total FLA asset finance (£m)||2,632||+4||+4||7,861||31,769||+5|
|Total excluding high value (£m)||2,483||-1||-1||7,695||30,752||+6|
|Plant and machinery finance (£m)||512||+1||1,515||+5||6,617||+12|
|Commercial vehicle finance (£m)||572||-14||1,934||-1||7,480||+1|
|IT equipment finance (£m)||293||+19||726||+14||2,285||+2|
|Business equipment finance (£m)||227||+6||624||+6||2,581||+7|
|Car finance (£m)||629||-2||243||+4||9,531||+5|
|Aircraft, ships and rolling stock finance (£m)||36||-41||60||-50||549||+20|
|Direct finance (£m)||1,153||-7||3,746||0||15,477||+4|
|Broker-introduced finance (£m)||579||+24||1,620||+21||5,839||+14|
|Sales finance (£m)||752||-8||2,329||+4||9,436||+7|
|Finance leasing (£m)||403||+1||1,022||+5||3,809||+6|
|Operating leasing (£m)||511||-12||1,624||-4||6,755||0|
|Lease/Hire purchase (£m)||1,225||+1||4,162||+5||16,924||+8|
|Other finance (£m)||1,053||+19||1,053||+19||4,281||+5|
Source: Asset Finance International