Asset finance market report

  • Asset finance increases

Asset finance and leasing: market trends

The FLA has released its March 2016 industry report, documenting leasing trends and overall figures for the industry, showing significant growth in almost every sector. With financing trends from the business finance industry, as well as consumer and motor finance, find a breakdown of the exact figures below to see what the growth might mean for the asset finance industry.

Business Finance

Most of the business finance industry has appeared to remain positive and maintain the steady growth already seen this year. The asset finance market achieved £3.4bn in new business in March alone, see a more detailed breakdown below.

1. IT equipment finance – up 29% YoY to £260m

2. Business equipment finance – up 11% YoY to £226m

3. Car finance – up 6% YoY to £1.1bn

4. Commercial vehicle finance – up 5% YoY to £774m

5. Plant and machinery finance – down 2% YoY to £609m

As seen from the figures above, the business finance sector has witnessed major year on year growth, with the asset finance industry seeing a 10% increase in new business when compared to March 2015.

So, what does this mean for business finance?

Without making projections too early, or taking into account any seasonal changes, the business finance sector is currently showing healthy growth in almost every area.

Even within plant and machinery finance, the figures aren’t all bad. The 2% decrease is actually a result of one significant increase, and one significant decrease. If you work with the construction plant finance industry, it can expect continued growth in line with the 9% year on year increase from March 2015 to March 2016. However, the agricultural plant finance industry has seen a decline, with a 10% decrease year on year.

The strongest new business growth was found in the vehicle finance sector, with the financing report showing commercial vehicle finance and business car finance both growing 9% quarter on quarter. Business equipment finance and plant and machinery finance saw only a fraction of this growth in Q1 2016, at 3% and 1% respectively, while IT equipment finance saw no change.

On the whole, the figures are encouraging for the asset finance industry, not only for March 2016, but the entire first quarter. April’s FLA leasing report, released shortly, will add further insight, however it appears that the asset finance industry seems set to continue with healthy growth.

Motor Finance & Consumer Finance

The financing report outlined business and consumer motor finance figures, showing a 7% increase in new business in March 2016 to 360,621 vehicles – equating to a sales value 13% higher than the previous year at £5.5bn.

The FLA financing report also details consumer finance business trends for March 2016, where new business growth slowed down (compared to previous months), yet revenue still saw an increase of 11%, reaching £9.2bn.

The Finance & Leasing Association report provides insights into a variety of areas and subsections of the financing industry.

Increases, both monthly and quarterly, appear to show positive growth in almost all areas of the asset finance industry and beyond.

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