The UK market is split on the Euro vote but will either decision have a major impact on the issues facing businesses operating in the UK?
The chatter at the UK’s Finance & Leasing Association (FLA) annual dinner in London last month pointed to positivity and confidence in the UK market.
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The UK has strong financial results and FLA chairman Nigel Clibbens reasoned there was a good chance that it would continue.
"In 2015, we provided a record level of new finance – £110bn – 9% more than in 2014," said Clibbens.
"Within that total, asset finance new business grew by 12%, and FLA members in the asset finance markets, through leasing and hire purchase, financed almost one-third of UK investment in machinery and equipment in 2015," he added.
"In fact, of the total asset finance new business last year, almost 60%, or £16.6bn, went to support SME investment in equipment.
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By GlobalDataAll good news. But there are a few challenges on the horizon.
David Cameron announced a UK referendum on British membership of the European Union for 23 June this year.
In my last editor’s letter I covered how this is affecting pipeline business.
But it was interesting to see the opinions reflected in the 1,500 attendees at the FLA dinner, as they were asked for their opinions by the BBC’s Today show journalist John Humphrys.
The room was split 60/40, with the majority wishing to stay in the EU.
But when Humphrys asked if anyone might change their position between now and then, roughly half the room put their hands up.
Whatever the outcome, it’s hard to say at this juncture what’s best for asset finance. Would a separate UK/EU bother the pan-European bank-backed lessors that operate in the UK?
It doesn’t seem to have phased the thinking behind the tie up of the German Borse with the London Stock Exchange, for example.
Seeing as most lessors approach sectors and assets, I can’t see a mass exodus from the UK on the cards if the UK voted to leave.
There are some who would argue that the UK has enough concerns of its own, as a nascent alternative finance market gets to grips with its identity, and pricing goes under pressure from competition for funders.
The FCA remuneration assessements and suitability papers might cause issues for current practice further down the track.
And across Europe there are threats to the leasing business, like cybersecurity or digital disruption, that have no respect for national boundaries at all.
