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August 18, 2009updated 12 Apr 2017 4:33pm

FLA: operating leasing up, total asset finance down

More and more British businesses are turning to operating leasing, despite demand for asset finance falling steeply, new research has shown. According to data published by the Finance & Leasing Association (FLA), the use of operating leasing increased by 9 percent in the second quarter, with demand for operating leasing the strongest for business equipment, where it rose by 48 percent year-on-year

By Jason T

More and more British businesses are turning to operating
leasing, despite demand for asset finance falling steeply, new
research has shown.

According to data published by the Finance & Leasing
Association (FLA), the use of operating leasing increased by 9
percent in the second quarter, with demand for operating leasing
the strongest for business equipment, where it rose by 48 percent
year-on-year.

However, the asset finance industry is still suffering overall,
seeing a 39 percent fall in demand compared to the same period last
year.

“Businesses are protecting their funds by investing in new
business equipment through operating leases. As the economy starts
to recover, there will be built-up demand for new equipment and
businesses will need immediate access to finance,” said Geraldine
Kilkelly, head of research and chief economist at the FLA.

Kilkelly added that the UK government could help the industry
meet this demand by extending tax breaks which are available to
profitable businesses, to less profitable SMEs.

Jason T Hesse

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