Latest figures from the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 41% in June 2020 compared with the same month in 2019.
In the first half of 2020, new business fell by 32% compared with the same period in 2019.
The business new car finance and commercial vehicle finance sectors reported falls in new business in June 2020 of 55% and 44% respectively, compared with the same month in 2019.
Over the same period, the business equipment finance and plant and machinery finance sectors reported falls in new business of 36% and 28% respectively.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market provided almost £2 billion of new business in June, up from a crisis-low of only £1.2 billion in May. The quarter end month of June is traditionally a strong month for the industry, and with many businesses closed or operating well below capacity, it is not surprising that new business was more than 40% lower than in June 2019.
“The outlook for the economy remains uncertain, with the industry facing a prolonged period of providing forbearance as a result of the crisis. We continue to urge the government and Bank of England to take action that ensures support for all lenders, including non-bank lenders, so that they can meet the demand for forbearance and pent-up demand for finance to invest in new equipment.”