Total asset finance new business (primarily leasing and hire purchase) fell by 22% in July 2020 compared with the same month in 2019, according to figures released by the Finance & Leasing Association (FLA).

In the seven months to July 2020, new business contracted by 31% compared with the same period in 2019.

The IT equipment finance and plant and machinery finance sectors reported falls in new business in July of 4% and 11% respectively, compared with the same month in 2019.

Over the same period, the commercial vehicle finance and business new car finance sectors reported falls in new business of 18% and 36% respectively.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market continued to report an easing in the rates of contraction of new business across asset sectors.

“The IT equipment finance sector remained relatively strong during the crisis, while July saw a return to growth in new finance provided for manufacturing equipment.

“The pick-up in the economy since June has been encouraging, but a great deal of uncertainty remains about the sustainability of the recovery over the coming months.

The industry is facing a prolonged period of providing forbearance as a result of the crisis and we, therefore, urge the Government and Bank of England to ensure that there is adequate support for all lenders so that they can meet the demand for both forbearance and new finance to invest in equipment and new technology.”