Asset finance new business fell by 1% in December 2023 but grew by 12% in 2023
New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell in December 2023 by 1% compared with the same month in 2022. In 2023 as a whole, new business was 12% higher than in the same period in 2022.
The business new car finance and commercial vehicle finance sectors reported new business up in December by 8% and 1% respectively, compared with the same month in 2022. The plant and machinery finance sector reported new business 22% lower over the same period.
Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The asset finance market reported its first monthly contraction in new business, year-on-year, since April 2022. Despite a slower final quarter, annual asset finance new business reached a record level of £38.3bn in 2023. Growth last year was driven by the vehicle finance sectors while the machinery and equipment finance sectors reported lower new business levels compared with 2022.
The industry supported investment by businesses of all sizes as new lending to SMEs grew by 7% to a new high of £23.5bn, while new lending to larger businesses increased by 19% to £13.3bn, the highest level since 2019.
“The asset finance industry has a proven track record in supporting the real economy by financing as much as 40% of UK investment in vehicles, machinery, and equipment. It is playing a key role in supporting businesses to make the transition to net zero. We continue to urge the government to extend the full expensing regime to include leasing in the Spring Budget.”
