Asset finance new business increased by 3% in September compared to the same month last year to £2.68bn (€3.78bn), according to the Finance & Leasing Association (FLA).

The IT equipment finance sector reported strong growth in new business, up 48% compared to September 2014, reaching £218m.

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Plant and machinery finance grew by 3% year-on-year to £465m, while business equipment finance shrank by 26% to £170m.

Commercial vehicle finance increased by 14% year-on-year to £667m, while car finance rose by 6% to £873m.

The aircraft, ships and rolling stock finance sector recorded an increase of 135% compared to September 2014, reaching £50m.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: "The growth in the asset finance market over the last two years has helped more businesses fund investment in essential equipment that they need to expand. The latest official data suggests that FLA members’ funding of UK investment in machinery, equipment and software has increased from 28.1% to 32.0% in only two years."

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By channel and product

Direct finance, which accounted for nearly half of all finance, rose by 6% year-on-year to £1.2bn in September. Sales finance increased by 13% year-on-year to £948m, while broker-introduced finance grew by 6% to £455m.

Lease/hire purchase, by far the most popular product in asset finance, grew by 17% year-on-year to £1.44bn in September 2015. Over the same period, new business through operational leasing expanded by 12% to £669, while finance leasing shrunk by 38% to 290m.