Not all areas of the economy are showing signs of difficulty – it’s a boom time for the asset finance sector, according to a report from the Finance & Leasing Association.
In July 2013, new business deals in the sector were up by 6%, based on asset finance loans of up to £20 million in value.
The growth rate including ‘high-value’ loans of over £20 million is a little lower, at 3%, but remains positive year-on-year.
And it is not only July that saw growth; the three-month lending rate was up by 3% on high-value loans and 4% on loans up to £20 million in the quarter ending July 2013.
The full 12 months ending July 2013 saw almost £21 billion, a 1% increase, lent on loans up to £20 million, and £21.5 billion lent overall – a decline of 1% including high-value loans, and the only overall negative figure in the report’s headline statistics.
Businesses are borrowing in order to buy, with an 11% increase in lending for the purchase of business equipment; commercial vehicle finance is up 16% year-on-year, and new sales finance business is up an even greater 17%.
Julian Rose, head of asset finance at the FLA, says the findings tally with other official reports recently published.
“The Department for Business’s SME Business Barometer found that, for the first time for nearly two years, the main reason for SMEs seeking external finance was to acquire new equipment,” he explains.
“The industry is optimistic about its ability to continue to serve more businesses,” he added, ahead of the FLA’s Asset Finance Regulation and Compliance Conference, which took place earlier this week.