The Finance & Leasing Association (FLA) has revealed that total asset finance new business (primarily leasing and hire purchase) fell by 14% in October 2020 compared with the same month in 2019.
In the ten months to October 2020, new business was 26% lower than in the same period in 2019.
The commercial vehicle finance sector reported a fall in new business of 6% in October 2020 compared with the same month in 2019. Over the same period, the IT equipment finance and plant and machinery finance sectors reported falls in new business of 31% and 20% respectively.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “Increased business uncertainty from the introduction of new restrictions to tackle rising coronavirus cases and the lack of a free trade agreement with the EU has weighed on business investment and demand for asset finance.
“The FLA’s latest data shows that asset finance new business was 26% lower in the 10 months to October 2020 than in the same period in 2019.
“The outlook for the UK economy has improved with the promised rollout of a vaccine before Christmas. The asset finance industry is in an ideal position to support businesses as they make the investment needed to increase productivity and build a sustainable future post-crisis.
“We urge the government and Bank of England to ensure a level playing field so that non-banks can continue to lend to those businesses that will drive change.”