New asset finance business in the UK fell by 22% in July according to the Finance and Leasing Association (FLA).
Though it remained down year-on-year, July represented an improvement compared to the preceding seven months, during which new business collectively fell by 31%.
Business new car and commercial vehicle finance saw the biggest falls by sector, down 36% and 18% respectively. Plant and machinery finance dropped by 11%, while IT equipment finance was comparatively steady, falling by 4%.
Over the past 12 months, IT is the only sector still showing growth compared to previous period, rising 3%.
The FLA’s head of research and chief economist, Geraldine Kilkelly said: “The asset finance market continued to report an easing in the rates of contraction of new business across asset sectors.
“The IT equipment finance sector remained relatively strong during the crisis, while July saw a return to growth in new finance provided for manufacturing equipment.
“The pick-up in the economy since June has been encouraging, but a great deal of uncertainty remains about the sustainability of the recovery over the coming months.
“The industry is facing a prolonged period of providing forbearance as a result of the crisis and we therefore urge the Government and Bank of England to ensure that there is adequate support for all lenders so that they can meet the demand for both forbearance and new finance to invest in equipment and new technology.”
|
July 2020 |
% change on prev. year |
3 months to Jul 2020 |
% change on prev. year |
12 months to Jul 2020 |
% change on prev. year | |
|---|---|---|---|---|---|---|
| Total FLA asset finance (£m) | 2,469 | -22 | 5,648 | -41 | 29,021 | -18 |
| Total excluding high value (£m) | 2,248 | -23 | 5,181 | -40 | 26,999 | -18 |
| By asset: | ||||||
| Plant and machinery finance (£m) | 572 | -11 | 1,392 | -28 | 6,294 | -15 |
| Commercial vehicle finance (£m) | 628 | -18 | 1,400 | -41 | 7,230 | -22 |
| IT equipment finance (£m) | 266 | -4 | 662 | -8 | 2,804 | 3 |
| Business equipment finance (£m) | 115 | -41 | 347 | -39 | 1,959 | -18 |
| Car finance (£m) | 659 | -30 | 1,263 | -55 | 7,548 | -24 |
| Aircraft, ships and rolling stock finance (£m) | 60 | -13 | 115 | -52 | 406 | -27 |
| By channel: | ||||||
| Direct finance (£m) | 1,040 | 2,374 | -47 | -47 | 13,222 | -21 |
| Broker-introduced finance (£m) | 483 | -17 | 1,119 | -37 | 5,676 | -15 |
| Sales finance (£m) | 725 | -12 | 1,689 | -32 | 8,101 | -14 |
| By product: | ||||||
| Finance leasing (£m) | 305 | -15 | 748 | -28 | 3,689 | -18 |
| Operating leasing (£m) | 510 | -16 | 1,039 | -42 | 5,668 | -19 |
| Lease/Hire purchase (£m) | 1,215 | -32 | 2,916 | -45 | 15,279 | -21 |
| Other finance (£m) | 415 | 32 | 811 | -14 | 3,377 | 5 |
Source: FLA
