The Finance & Leasing Association (FLA) has reported that total asset finance new business (primarily leasing and hire purchase) grew by 3% in July 2021 compared with the same month in 2020.

In the first seven months of 2021, new business was 24% higher than in the same period in 2020.

The business equipment finance and plant and machinery finance sectors reported new business up in July by 47% and 10% respectively, compared with the same month in 2020. Over the same period, new business in the IT equipment finance sector fell by 51%.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “Overall growth in the asset finance market slowed in July, but many asset sectors and new business channels continued to report robust recoveries. New finance provided for agriculture and construction equipment each grew by 24% in July and annual new business in the broker and vendor finance channels has almost reached pre-pandemic levels.

“The current shortage of assets available to finance – particularly in the automotive, machinery and electronic sectors – is weighing on the recovery of the industry and the wider economy. Nevertheless, the rebound of the asset finance market so far this year demonstrates its underlying strength and points to further growth in the year ahead.

“FLA members want to do even more to support businesses invest in the cleanest and most efficient plant and machinery. We therefore continue to urge the government to extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing.”