Total asset finance new business (primarily leasing and hire purchase) declined by 41% year-on-year in June, according to the latest figures from the Finance and Leasing Association (FLA).

In the first half of 2020, new business fell by 32%, compared with the same period in 2019.

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The business new car finance and commercial vehicle finance sectors reported falls in new business in June 2020 of 55% and 44% respectively, compared with the same month in 2019.  Over the same period, the business equipment finance and plant and machinery finance sectors reported falls in new business of 36% and 28% respectively.

Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market provided almost £2bn of new business in June, up from a crisis-low of only £1.2bn in May.

The quarter end month of June is traditionally a strong month for the industry, and with many businesses closed or operating well below capacity, it is not surprising that new business was more than 40% lower than in June 2019.

“The outlook for the economy remains uncertain, with the industry facing a prolonged period of providing forbearance as a result of the crisis. We continue to urge the government and Bank of England to take action that ensures support for all lenders, including non-bank lenders, so that they can meet the demand for forbearance and pent-up demand for finance to invest in new equipment.”

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Last month, the FLA published its recovery plan for the UK economy, recommending a phased approach of short, medium and long-term measures.

Stephen Haddrill, director general of the FLA, said: “The chancellor’s Economic Statement set out a range of short-term stimuli, but these measures need to be consolidated with substantive plans for long-term growth – and all of this must start with ensuring that the UK’s providers of business and consumer finance are in a position to lend.”