Total new asset finance business in June 2022 rose 2% year-on-year, according to findings from the UK trade body, Finance & Leasing Association (FLA).
New business in the first six months of the year was also 2% more than the year-ago period.
Sector-wise data revealed a 5% increase in commercial vehicle finance sector’s new business in June 2022 on a year-on-year basis.
For the same duration, the business equipment finance sector’s new business grew 9% while that of the plant and machinery finance sector rose 3%.
FLA director of research and chief economist Geraldine Kilkelly said: “The asset finance market reported growth across many sectors in June, but overall growth remained modest as supply shortages continued to weigh on the recovery of the new car finance and IT equipment finance sectors.
“The first half of 2022 saw encouraging signs of improved demand for asset finance from SMEs as new lending to these businesses increased by 6% compared with the same period in 2021. Annual asset finance new business to SMEs in June reached £20.6bn, 1% higher than its pre-pandemic peak.”
Kilkelly forecast weak business investment in the second half of the year due to the impact of soaring inflation, interest rates and taxes on consumer spending and business margins.
FLA’s Q3 2022 industry outlook survey reveals that 62% of asset finance respondents anticipate new business growth over the next year. The figure was 76% in the Q2 2022 survey.
“Nevertheless, the industry remains optimistic about the opportunities for growth and, in particular, about the vital role it will play in supporting businesses of all sizes to invest in greener technology and to meet net-zero targets set by the Government,” Kilkelly added.