Figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew by 1% in December 2019, and by 6% in 2019 to reach a record annual total of £35.7bn.

In December, the IT equipment finance sector continued to report double-digit growth as new business increased by 10% compared with the same month in 2018.

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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.

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.”

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Stephen Haddrill, director general at the FLA, said: “FLA members play a vital role in supporting economic growth. The industry is front and centre of helping businesses drive up productivity and overcoming the challenges posed by climate change. Their funding has increased despite Brexit and overall slippage in investment as asset finance has replaced conventional borrowing through loans and overdrafts.

“Our 2020 Budget submission sets out our proposals for how FLA members can help achieve the Government’s ambitious plans for growth and a greener, cleaner world. We call on the Government to ensure those who will fund investment are at the table when developing and testing a credible delivery plan.”