📊 UK Finance & Leasing Association Statistics - A Look Back to 2023

Data from the Finance & Leasing Association (FLA) reveals significant trends in the UK finance and leasing market for 2023. FLA members provided a substantial £151 billion in new finance to UK businesses, households, and the public sector, with £63 billion of this coming from non-bank lenders. This highlights the crucial role of diverse financing sources in supporting economic activities.

In the asset finance sector, businesses received £38 billion, with £23 billion directed towards SMEs for new equipment, plant, machinery, and software. This investment is vital for the growth and modernisation of small and medium-sized enterprises, which are the backbone of the UK economy. However, the machinery and equipment finance sectors faced challenges in 2023, with new business falling by 5% and 13% respectively. Companies delayed investment plans due to economic uncertainties and anticipation of changes in the Bank Rate. Despite these challenges, the asset finance market reported a 9% growth in new business in Q2 2024, showing resilience and adaptability.

The consumer credit sector saw £113 billion in new finance, representing nearly a third of all new consumer credit in the UK. This included £52 billion for new and used car purchases, covering over 78% of private new car registrations. This trend underscores the importance of consumer credit in facilitating major purchases and supporting the automotive industry.

While the vehicle finance sector showed continued growth, the machinery and equipment finance sectors experienced declines. Factors contributing to this decline included companies delaying investment plans due to economic uncertainties and anticipation of changes in the Bank Rate. Despite these challenges, the asset finance industry remains crucial for encouraging private sector investment, which is essential for higher economic growth. FLA members finance up to 40% of all UK investment in vehicles, machinery, and equipment.

Looking at broader UK economic statistics, the Office for National Statistics (ONS) reported that business investment in the UK increased by 3.3% in Q2 2023 compared to the previous quarter. This growth was driven by increased spending on ICT equipment and other machinery. Additionally, the UK’s GDP grew by 0.5% in Q2 2023, reflecting a steady recovery from the economic impacts of the pandemic. These figures highlight the interconnectedness of finance, investment, and economic growth.

These trends highlight the dynamic nature of the UK finance and leasing market, with significant contributions to both business growth and consumer spending. As we move forward, fostering private sector investment will be key to sustaining economic momentum.

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Reference: 2024-0100-016