Total asset finance new business (primarily leasing and hire purchase) grew in March 2022 by 13% compared with the same month in 2021, according to new figures released today by the Finance & Leasing Association (FLA).

In Q1 2022 as a whole, new business was 7% higher than in the same quarter in 2021.

The IT equipment finance and business equipment finance sectors reported new business up in March 2022 by 73% and 29% respectively, compared with the same month in 2021. Over the same period, the plant and machinery finance sector reported new business growth of 14%.

Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said: “In March, the asset finance market reported its strongest performance for three years as the monthly new business total reached more than £3.6bn. Finance for high-value projects boosted growth with new lending to large corporates up by 21%. New lending to SMEs was also strong, increasing by 10% compared with March 2021.

“The UK economic outlook has weakened significantly because of the squeeze on profit margins and household incomes from higher inflation. Despite this, business investment is expected to rebound this year and our latest figures demonstrate that asset finance remains business-critical for many companies during a period of heightened uncertainty.

“With the asset finance industry financing as much as 40% of UK investment in machinery and equipment, we urge the Government to include leasing in the reformed capital allowance regime it is planning. This will allow the industry to support more businesses to grow.”

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Asset finance new business fell by 2% in February 2022: FLA