Total asset finance new business (primarily leasing and hire purchase) grew in May 2022 by 5% compared with the same month in 2021, according to new figures released by the Finance & Leasing Association (FLA).

In the five months to May 2022, new business was 2% higher than in the same period in 2021.

The business equipment finance and plant and machinery finance sectors reported growth in new business in May of 33% and 15% respectively, compared with the same month in 2021.

The commercial vehicle finance sector reported an increase in new business of 6% over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The growth in the asset finance market in May was driven by new lending to SMEs which increased by 11% compared with the same month last year, and new business deals between £50,000 to £1 million grew by 15% over the same period.

“Supply shortages have slowed the pace of recovery in the asset finance market, particularly in the new car finance and IT equipment finance sectors, and we expect that to continue throughout the second half of 2022.

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“With more than 35% of all UK investment in transport equipment and machinery financed by FLA members in Q1 2022, the asset finance industry will play a critical role in delivering the Government’s net-zero targets. We are calling on the Government to introduce a Green Finance Wholesale Guarantee so that funding of all types of greener technology is seen as an attractive investment proposition.”

UK asset finance new business fell by 16% in April 2022: FLA