View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
  2. Bank Asset Finance
June 24, 2011updated 12 Apr 2017 4:13pm

Commercial vehicle leasing jumps 31% in Q1

Finance for leasing commercial vehicles leapt by 32% in the first quarter of this year, compared with the year-earlier period, according to the Finance & Leasing Association (FLA). The FLA, the UK trade association representing consumer credit, motor finance and asset finance sectors, said the growth in demand for vehicle leasing was partly due to small businesses switching to more environmentally-friendly vans. More than £1bn (1.14bn) was provided by finance companies for leasing or hire purchase of around 20,000 new vans, trucks and lorries in the first quarter of 2011, the FLA figures also revealed.

By Nick Huber

Photo of FLA head of asset finance Julian RoseFinance for leasing commercial vehicles leapt by 32% in the first quarter of this year, compared with the year-earlier period, according to the Finance & Leasing Association (FLA).

The FLA, the UK trade association representing consumer credit, motor finance and asset finance sectors, said the growth in demand for vehicle leasing was partly due to small businesses switching to more environmentally-friendly vans.

More than £1bn (€1.14bn) was provided by finance companies for leasing or hire purchase of around 20,000 new vans, trucks and lorries in the first quarter of 2011, the FLA figures also revealed.

One of the fastest-growing parts of asset finance is the broker industry. Broker-arranged commercial finance rose 19% in the last 12 months to £3bn – the highest annual total since June 2009, the FLA said.

There was also growth in finance provided for business equipment, plant and machinery and IT equipment. Total asset finance increased by 8% over the quarter.

Finance arranged by equipment dealers and distributors rose by 24% in the first quarter of 2011 to £1.2bn.

FLA head of asset finance Julian Rose: “Many of the small businesses that provide the services that keep our homes and offices going are replacing their old vehicles with more suitable and more environmentally-friendly models.

“Our evidence shows that small businesses like plumbers, builders and delivery companies are turning to asset finance rather than paying upfront.

“More and more businesses are making use of the wide choice of available asset finance. Finance direct from a bank or finance house is still the most popular, but finance from an equipment dealer or distributor, or through a commercial finance broker, is increasing in popularity.”

• UK asset finance brokers are confident about their prospects over the next quarter, according to the latest confidence survey from the FLA. Most are expecting growth.

A total of 78% of respondents expect broker-introduced asset finance to grow over the next three months, while 75% expect equipment dealer and distributor finance will do the same.

Forty-two% expect SME use of asset finance to grow over the next quarter, while 58% think it will remain steady.

On the other hand, just 21% of respondents believe asset finance market conditions will improve over the next three months, while 76% think they will remain unchanged. The remaining 3% expect conditions to deteriorate.

The quarterly survey asked senior industry executives for their opinions on the prospects for both the UK economy and the asset finance industry.

FLA head of research and chief economist Geraldine Kilkelly said: “We are already seeing a recovery in SME investment via asset finance, including for commercial vehicles, IT and other business equipment.

“The survey shows many of our members expect to see growth over the next quarter.”

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Thursday. The leasing industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Leasing Life