Asset finance new business reached record levels in 2017 following growth of 5% during the year, according to the latest figures from the UK’s Finance & Leasing Association (FLA).
The sector achieved its seventh consecutive year of growth, with new business levels reaching almost £32 billion last year.
The plant and machinery finance and commercial vehicle finance sectors reported new business up in 2017 by 12% and 1% respectively, compared with 2016, while new finance for business equipment was up by 7% over the same period.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance industry reported a record level of new business of almost £32 billion in 2017, despite challenging economic conditions and subdued business investment growth.
“The latest figures also reveal that asset finance is a vital source of funding for SMEs when investing in business equipment and machinery. Of the total asset finance new business in 2017, £18.6 billion went to SMEs – 12% higher than in 2016.”
During 2017, FLA members provided £128 billion of new finance to UK businesses and households, with £32 billion of finance provided to businesses and the public sector.
FLA members financed more than one-third of UK investment in machinery, equipment and purchased software in the UK last year.
UK asset finance market 2017
| Dec17 | % change on
prev yr |
3 mths to
Dec 17 |
% change on
prev yr |
12 mths to
Dec 17 |
% change on
prev yr |
|
|---|---|---|---|---|---|---|
| Total FLA asset finance (£m) | 2,632 | +4 | +4 | 7,861 | 31,769 | +5 |
| Total excluding high value (£m) | 2,483 | -1 | -1 | 7,695 | 30,752 | +6 |
| By asset: | ||||||
| Plant and machinery finance (£m) | 512 | +1 | 1,515 | +5 | 6,617 | +12 |
| Commercial vehicle finance (£m) | 572 | -14 | 1,934 | -1 | 7,480 | +1 |
| IT equipment finance (£m) | 293 | +19 | 726 | +14 | 2,285 | +2 |
| Business equipment finance (£m) | 227 | +6 | 624 | +6 | 2,581 | +7 |
| Car finance (£m) | 629 | -2 | 243 | +4 | 9,531 | +5 |
| Aircraft, ships and rolling stock finance (£m) | 36 | -41 | 60 | -50 | 549 | +20 |
| By channel: | ||||||
| Direct finance (£m) | 1,153 | -7 | 3,746 | 0 | 15,477 | +4 |
| Broker-introduced finance (£m) | 579 | +24 | 1,620 | +21 | 5,839 | +14 |
| Sales finance (£m) | 752 | -8 | 2,329 | +4 | 9,436 | +7 |
| By product: | ||||||
| Finance leasing (£m) | 403 | +1 | 1,022 | +5 | 3,809 | +6 |
| Operating leasing (£m) | 511 | -12 | 1,624 | -4 | 6,755 | 0 |
| Lease/Hire purchase (£m) | 1,225 | +1 | 4,162 | +5 | 16,924 | +8 |
| Other finance (£m) | 1,053 | +19 | 1,053 | +19 | 4,281 | +5 |
Source: Asset Finance International