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.
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.
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.”