This is in line with predictions made for the summer months by asset finance executives, and with the rise reported by the recent BRDC Continental SME Finance Monitor, which showed a five percentage point increase over the last year to 23% in the number of firms seeking external finance who say they are considering using asset finance.
Growth in asset finance was led by deals in the plant and machinery and IT equipment sectors, with new business up 20% and 31% respectively compared with July 2011. Car finance fell slightly compared with the previous year, and commercial vehicle new business was flat.
Over the next twelve months, the FLA's confidence survey of asset finance senior executives shows that 74% expect a slight increase in business investment, and 79% a similar increase in funding availability. 91% of respondents expect an increase in lending to SMEs - which accounted for 59% or £3.1bn of new business in Q2 2012. Asset finance lenders expect modest growth in new business over the next twelve months in all of the finance channels - broker, vendor and direct.
Geraldine Kilkelly, Head of Research and Chief Economist at the Finance & Leasing Association, commented:
"Our figures show that asset finance continues to provide an attractive borrowing solution for businesses looking to make capital investments, with a growth rate of 10% so far in 2012 for small and middle ticket deals.
"Almost £6 of every £10 lent goes to SMEs. The latest BRDC Finance Monitor, showing growth in the number of SMEs considering using asset finance, supports our members' assessment that business to SMEs will increase over the next year."
