Finance for leasing commercial vehicles leapt
by 32% in the first quarter of this year, compared with the
year-earlier period, according to the Finance & Leasing
Association.

The FLA, the UK trade association representing
consumer credit, motor finance and asset finance sectors, said the
growth in demand for vehicle leasing was partly due to small
businesses switching to more environmentally-friendly vans.

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More than £1bn (€1.14bn) was
provided by finance companies for leasing or hire purchase of
around 20,000 new vans, trucks and lorries in Q1 2011, the FLA
figures also revealed.

One of the fastest-growing parts of asset
finance is the broker industry. Broker-arranged commercial finance
rose 19% in the last 12 months to £3bn — the highest annual total
since June 2009, the FLA said.

There was also growth in finance provided for
business equipment, plant and machinery and IT equipment. Total
asset finance increased by 8% over the quarter.

Finance arranged by equipment dealers and
distributors rose by 24% in Q1 2011 to £1.2bn.

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Julian Rose, head of asset finance at the FLA,
said: “Many of the small businesses that provide the services that
keep our homes and offices going are replacing their old vehicles
with more suitable and more environmentally-friendly models. Our
evidence shows that small businesses like plumbers, builders and
delivery companies are turning to asset finance rather than paying
upfront.

“More and more businesses are making use of
the wide choice of available asset finance. Finance direct from a
bank or finance house is still the most popular, but finance from
an equipment dealer or distributor, or through a commercial finance
broker, is increasing in popularity.”

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