Total asset finance new business (primarily leasing and hire purchase) grew in November 2021 by 5% compared with the same month in 2020, according to new figures released by the Finance & Leasing Association (FLA).

In the eleven months to November 2021, new business was 16% higher than in the same period in 2020.

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The plant and machinery finance and commercial vehicle finance sectors reported new business up in November by 35% and 7% respectively, compared with the same month in 2020.

By contrast, the business equipment finance and IT equipment finance sectors reported falls in new business of 14% and 50% respectively, over the same period.

Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said:

“The asset finance market returned to growth in November with new finance provided to SMEs up by 21% compared with the same month in 2020. New business in 2021 as a whole is likely to be £31 billion, 13% lower than the pre-pandemic peak as disruption caused by equipment shortages and the broader economic impacts of new waves of Covid-19 slow the rate of recovery.

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“The industry has remained resilient during the pandemic and continues to support businesses of all sizes to invest in a more sustainable future. Our latest research suggests that FLA members financed almost 40% of UK investment in machinery, equipment and purchased software in Q3 2021, the highest rate since Q2 2019.

“We continue to urge the Government to extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing so the industry can support more businesses to recover and grow.”

UK asset finance market fell by 7% in October 2021: FLA