UK sub-£20m asset finance business grew 9% in
May compared to April and was up 11% year-on-year, continuing a
trend which could take the market back to pre-credit crunch levels
by 2015.
The Finance & Leasing Association (FLA)
reported its members provided £1.79bn (€2.26bn) in sub-£20m asset
finance in May compared to £1.65bn in April.
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Total new business for the month including
deals above £20m was £1.81bn, a 1% increase on the figure for May
2011.
FLA members reported an upward trend over
longer periods as well, with the last months’ new business up 9%
year-on-year, and up 12% year-on-year for the 12 months to the end
of May.
Cranes, mainframes and
automobiles
Strong growth continued to be felt in the car
finance and plant and machinery finance sectors which grew 27% and
26% respectively.
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By GlobalDataThe IT equipment sector also continued to show
strong growth, although from much lower levels than plant and
machinery and car finance. Business in the sector was up 38%
year-on-year in May to £88m.
There was also strong growth in the sales
finance channel, according to the FLA which reported 27% more
finance was provided through commercial vehicle sellers, tractor
suppliers, computer suite vendors, and other equipment suppliers
than in May 2011. Sales finance accounted for 29% of all asset
finance provided to businesses in May.
Geraldine Kilkelly, head of research and chief
economist at the FLA, said: “Asset finance is now very much on an
upward curve. At current growth rates, the total asset finance
market for deals worth up to £20m will be back to pre-credit crunch
levels by 2015.
“High acceptance rates in the asset finance
market have meant that lenders are able to help a large number of
businesses with their investment needs. New Government schemes have
involved some asset finance lenders, helping them to lend even
more.
“We are now asking that the new Funding for Lending scheme be opened to
all lessors – including those who have not qualified for previous
Government assistance schemes.”
grant.collinson@vrlfinancialnews.com
