Figures released today by the Finance & Leasing Association (FLA) show 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.

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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.

“The temporary increase in the Annual Investment Allowance for plant and machinery from 1 January 2019 announced in the last Budget should support further growth in this sector over the next few months.”

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n 2017, FLA members provided £128bn of new finance to UK businesses and households.  £32 bn of finance was provided to businesses and the public sector. FLA members financed a third of UK investment in machinery, equipment and purchased software in the UK in 2017.

In the November 2018 results, total asset finance recorded for the month was £2.54bn, with no change in year-on-year results. By asset, business equipment finance recorded an 8% year-on-year rise to £232m.

By channel, the £1.2bn of direct finance recorded was a 5% year-on year increase for November. Broker-introduced finance was up 8% to £545m, and sales finance was down 11% to £707m.

By product, operating lease was down 15%, to £496m. Lease and hire purchase was up 5% to £1.46bn and finance leasing was up 10% to £320m. Other forms of finance were down 1% to £191m.