Total asset finance new business (primarily leasing and hire purchase) fell by 18% in August 2020 compared with the same month in 2019, according to figures released by the Finance & Leasing Association (FLA).
In the first eight months of 2020, new business decreased by 30% compared with the same period in 2019.
The IT equipment finance sector reported growth in new business of 1% in August compared with the same month in 2019.
Over the same period, the commercial vehicle finance and plant and machinery finance sectors reported falls in new business of 21% and 17% respectively.
Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “In August, the asset finance market continued to report lower levels of new business year-on-year.
“There were pockets of growth reported by the IT equipment finance and manufacturing equipment finance sectors.
“The asset finance industry has a long tradition of supporting smaller businesses fund capital investment, with 60% of annual new business provided to SMEs.
“To ensure these customers can continue to obtain the finance they need to innovate and grow, we urge the Government and Bank of England to support all lenders, including non-banks, by removing the obstacles that still exist around access to funding.”
The FLA recently published its recovery plan for the UK economy, recommending a phased approach of short, medium and long-term measures.
Stephen Haddrill, director general of the FLA, said: “The chancellor’s Economic Statement set out a range of short-term stimuli, but these measures need to be consolidated with substantive plans for long-term growth – and all of this must start with ensuring that the UK’s providers of business and consumer finance are in a position to lend.
“This is not the case at the moment and without their input, the recovery on high streets and industrial estates will stall.”