Figures released by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase) grew by 9% in October, compared with the same month last year.

The plant and machinery finance and business equipment finance sectors reported new business  up by 16% and 29% respectively, compared with October 2017, while new finance for commercial vehicles increased by 23% over the same period.

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Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market made a strong start to the final quarter of 2018, with new finance for construction and agricultural equipment up in October by 27% and 19% respectively, compared with the same month in 2017. 

“Asset finance new business in 2018 as a whole is likely to reach a record level, despite continued economic uncertainty weighing on business investment.”

Total asset finance for October 2018 was £2.89bn. The largest falls by asset class were in IT equipment finance, which had a 19% fall year-on-year to £167m, and car finance, which fell 14% to £763m.

By product, finance leasing had a 32% year-on-year rise to £430m. Operating leasing had a 2% fall to £520m. Lease/hire purchase had an 8% rise to £1.653bn. Other forms of finance fell 11%, to £195m.

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The FLA’s September results show new business growth of 6% for Q3 2018, compared to the same quarter last year. The business car finance sector reported a year-on-year fall in new business of 20% for the month of September, down to £687m. Commercial vehicle finance also recorded a drop, down 3% year-on-year to £698m, both drops attributed by the FLA to the effect of recent WLTP emissions regulation.

Across 2017, FLA members provided £128bn of new finance to UK businesses and households. Around £32bn of finance was provided to businesses and the public sector. FLA members financed a third of UK investment in machinery, equipment and purchased software in the UK in 2017.