28.7% of UK fixed capital investment in 2012 was enabled using asset finance according to new figures from the Finance & Leasing Association.
Such high levels of recourse to asset finance have not been seen since 2008 and equate to over £21bn worth of investment funded through asset finance. The Finance & Leasing Association (FLA) expects further growth of around 10% in the use of asset finance in 2013.
The FLA’s confidence in the growing popularity of asset finance to support fixed capital investments comes despite a slow start to 2013 in which new hire purchase contracts fell 2% in February when compared to last year.
Julian Rose, head of asset finance at the FLA, said that government’s new Investment Programme for SMEs, revealed in tandem with detail on the new Business Bank, should boost the use of asset finance and insisted the FLA’s “figures show an increasing appetite on the part of businesses to fund growth through leasing.”
Mr Rose warned however that “the Business Bank’s new programme must be properly coordinated with the Bank of England’s Funding for Lending Scheme to ensure that Government interventions work through all parts of the finance markets.”
The FLAs data includes detail on the use of asset finance to support multiple types of fixed asset investments including plant and machinery, commercial vehicles and IT equipment.