Commercial vehicle finance is leading the recovery as small and medium sized businesses seek alternative forms of financing.
According to latest statistics from the Finance & Leasing Association, finance provided for commercial vehicles was up by 32% in the first quarter of the year, compared with Q1 2010.
More than £1 billion was provided by finance companies for leasing or hire purchase of around 20,000 new vans, trucks and lorries in Q1 2011.
There was also growth in finance provided for business equipment, plant and machinery and IT equipment. Total asset finance provided was up by 8% over the quarter.
Businesses are changing the way they find finance. Finance provided through commercial finance brokers is up by 19% in the last 12 months to £3 billion – its highest yearly total since June 2009. And finance arranged by equipment dealers and distributors is enjoying a similar increase – up by 24% in Q1 2011 to £1.2 billion.
Julian Rose, head of asset finance at the FLA, said: “Many of the small businesses that provide the services that keep our homes and offices going are replacing their old vehicles with more suitable and more environmentally-friendly models; our evidence shows that small businesses like plumbers, builders and delivery companies are turning to asset finance rather than paying upfront.
“More and more businesses are making use of the wide choice of available asset finance. Finance direct from a bank or finance house is still the most popular, but finance from an equipment dealer or distributor, or through a commercial finance broker, is increasing in popularity."