Asset finance industry – the tale so far and predictions for 2020
Asset finance is booming in the UK. This type of funding is used by businesses to acquire equipment, machinery and vehicles without the need for heavy upfront costs. The industry has seen promising growth in 2019, so we are keen to lend our insights and predictions for how asset finance has been performing and whether it will continue to grow in 2020.
The tale so far
The asset finance industry has seen impressive year-on-year growth for a long time...
The market reached a record level during 2018 with new business totalling almost £32.5billion. This was an overall growth of 3% compared to 2017 and represented the eighth consecutive year of growth for the industry, according to the Finance and Leasing Association. Of that total, £18.6bn was provided to small and medium-sized businesses – 12% higher than in 2016. This demonstrates that asset finance is a vital source of funding in a climate where banks are not perceived to be lending to small firms. By product, lease/hire purchase was by far the most popular – over a 300% larger share than second-placed operating lease.
It’s the same story for 2019 – record-breaking numbers. From September 2018-19, £34.5billion worth of assets were funded in the UK, representing a 7% growth. By asset, commercial vehicle finance has the largest share of the market at over £9billion. Lease/hire purchase remains the most popular product by an even larger percentage than in 2018.
What’s next for asset finance in 2020?
Executives and senior bankers at UK lenders have warned about ‘overheating’ in the industry… We do NOT agree.
The business lending market as a whole has struggled to gain momentum in recent years, but asset finance has bucked this trend and has proven to be a popular choice for businesses large and small across the UK.
Analysts state that the UK asset finance market is unlikely to grow dramatically as it has been in the next couple of years but will remain a key funding option for businesses. It’s increasingly difficult to achieve finance from traditional options, which is why the relativity new asset finance industry is now a beacon for businesses seeking to fuel growth through their assets.
Secure, fixed costs; more flexibility than a traditional bank loan; better cash flow; flexible credit; protection of working capital – these are just a handful of reasons why asset finance is booming and will continue to do so in 2020.
Need asset finance for your business?
Dawsongroup Finance delivers asset finance and leasing strategies for business to improve their current fleet of vehicles, or simply secure a cost-effective business loan. Working with many sister companies as part of Dawsongroup plc, we can also advise on which is the right asset for your business – whether that be a truck, van, bus, coach, forklift truck, coldstore, temporary kitchen or road sweeper. Contact us by emailing firstname.lastname@example.org or calling 01425 474070.
To find out more, please contact us.
Address: 21 Headlands Business Park, Salisbury Road, Ringwood, Hampshire BH24 3PB