Asset finance increased by 8% year-on-year to reach £2.15bn (€2.51bn) in February, according to figures released by the Finance and Leasing Association (FLA).

Leasing and hire purchase made up the majority of new business among FLA members, rising 7% to £1.17bn, while finance leasing declined 13% to £232m over the same period. Operating leasing experienced 16% year-on-year growth in February 2017, while other finance rose 19% to £280m.

As in January, direct finance was the most popular channel for asset finance, which grew 6% year-on-year to £1.06bn in February. Broker-introduced finance rose by 19% year-on-year to reach £427m over the same period. Sales finance declined by 2% year-on-year to £427m in new leasing business in February of this year.

Plant and machinery finance grew by 11% year-on-year to £509bn in new business, and business equipment finance rose 24% over the same period, reaching £213m.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market has made a strong start to 2017, with new business up by 12% in the first two months of the year.

“The industry’s overall performance reflects the improvement reported in recent surveys of investment intentions, which have strengthened as businesses have become more confident about demand in the short term at least.”