Total asset finance new business (primarily leasing and hire purchase) grew by 106% in May 2021 compared with the same month in 2020, according to latest data from the Finance & Leasing Association (FLA).

In the first five months of 2021, new business was 26% higher than in the same period in 2020.

The commercial vehicle finance sector reported new business up by 126% in May compared with the same month in 2020. The plant and machinery and business equipment finance sectors reported new business up by 58% and 20% respectively, over the same period.

By contrast, the IT equipment finance sector reported new business 29% lower in May than in the same month in 2020.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The broad-based recovery in the asset finance market continued in May as businesses have become more optimistic of a strong economic recovery.  The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with Covid-19 during the first lockdown and we expect these to moderate in the coming months.  Nevertheless, the industry is on track to return to pre-pandemic levels of new business during the course of this year.

“Our latest research also shows a rebound in the share of UK investment in machinery, equipment and purchased software financed by FLA members which reached 37.1% in Q1 2021. We continue to urge the government to recognise the importance of the asset finance market in supporting business investment and extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing.”