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April 2, 2019

SME leasing statistics indicate continuation in growth across Europe

SME leasing statistics released by a number of industry bodies are all showing the power of leasing as we head towards the third decade of the 21st century.

By Christopher Marchant

SME leasing statistics released by a number of industry bodies including the Finance and Leasing Association (FLA), the British Business Bank (BBB), and Leaseurope are all showing the power of leasing as we head towards the third decade of the 21st century.

FLA

Figures released by the FLA showed that asset finance business hit £32.57bn in 2018, a 3% rise on 2017’s figure.

Asset finance new business (primarily leasing and hire purchase) grew in December by 7% to £2.78bn compared with the same month in 2017.

The plant and machinery finance and commercial vehicle finance sectors reported new business up in December by 29% and 18% respectively, compared with 2017, while new finance for IT equipment was up by 16% over the same period.

Business finance equipment was up 11% in December to £247m, and up 16% to £2.65bn as a whole.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market reported strong growth across many sectors in the final quarter of 2018 which contributed to a record level of new business in 2018 as a whole of almost £33 billion.  This represented the eighth consecutive year of growth.”

BBB

While the FLA may have reported overall asset finance business growth, British Business Bank (BBB) research showed a decline in growth of SME lending with 36% of smaller businesses using external finance compared to 44% in 2012.

Over 7 in 10 firms indicated that they would rather forgo growth than take on debt through external finance.

Around 29% of SMEs, up from 22% in 2017, expect the UK leaving the European Union to have a negative effect on their business. A similar proportion (34%) expect it to be more difficult to access finance post-departure, with only 3% expecting it to be easier. Just over half of those smaller businesses surveyed in Q4 2018 expect to grow over the next 12 months.

Leaseurope

The Leaseurope European business confidence survey has recorded a “generally positive’ outlook for the continent in 2019.

The report was published in conjunction with asset finance provider Invigors EMEA, and also noted there were “growing signs of caution in some areas.”

The survey’s business confidence index (BCI) tracked the European leasing market sentiment over time. Index values above 100 suggested an increased confidence in future business performance over the next six months, while values below 100 indicate pessimism towards future performance.

The BCI stood at 126 in December, a decrease from the 133 recorded in June 2018 and 136 in December the previous year. Factors such as expectations on new business growth, net profit, bad debt and survey participants’ overall perception of their company’s prospects were all considered to have contributed to the trend.

Global Leasing Report

The thirteenth Global Leasing Report by White Clarke Group showed 32.7% growth in leasing on the European continent for the calendar year 2017.

Compilation of the report began in November 2018, and the White Clarke reports showed continued growth in the European sector for the first three financial quarters of last year.

The UK asset finance market was up by 5% in 2017 bringing the seventh consecutive year of growth in the UK asset finance market. Figures released by the Finance & Leasing Association (FLA) show that asset finance business in the UK hit £32.57bn in 2018, a 3% rise on 2017’s figure.

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