New figures released by the Finance & Leasing Association (“FLA”) show that asset finance new business (primarily leasing and hire purchase) grew by 5pct in 2016 – the sixth consecutive year of growth. The figures also remind one that it has taken many years to reach 2008 levels again, in terms of asset finance volumes, although that is partly due to the virtual disappearance of the big ticket leasing business.
Commercial vehicle finance and business equipment finance sectors was up 7pct and 16pct respectively in 2016, while new finance for plant and machinery was flat over the same period.
We asked if there was any marked trend that had emerged in the figures over the years, and were told that there had been a definite and marked shift towards hire purchase, though it was not clear what the driver had been, but possibly the Annual Investment Allowance had been an influence.
Although the FLA reports that December was “quiet” and anecdotal evidence from brokers is that January was equally so, the very latest feedback is that in February new business is back on track. A lot depends on the economy in 2017, and some insight may be given to attendees of the FLA Annual Dinner on February 28th, when, it is rumoured, that ex-Chancellor Alistair Darling (now Baron Darling of Roulanish, PC) will be the after-dinner speaker.
Commenting on the FLA statistics, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said, “Despite a quiet December, asset finance new business reached £30 billion in 2016 as a whole, the highest annual total since 2008, and SMEs accounted for £16.8 billion of that figure. Our latest industry confidence survey suggests a broadly stable outlook, with modest new business growth in 2017.”