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June
this year saw growth in new asset finance, including commercial vehicles and
other business equipment, for the first time since in almost two years.
According to new figures from the FLA, business investment through asset finance
increased 26% in June, compared to the same month last year, suggesting that
business confidence is showing the first signs of recovery.
But the growth is from a low base because the decline in investment over the
last two years was greater and more rapid than in previous recessions.
FLA members provided more than £2 billion of business finance for equipment
ranging from computers and telecoms systems to white vans and forklift trucks in
June. Commercial vehicle and business equipment finance grew by 13% and 25%
respectively compared to June 2009.
Commenting on the statistics, Julian Rose, Head of Asset Finance at the FLA,
commented: “Any sign of growth is good news, but the severity of the drop in
business investment during the recession means that a return to pre-crunch
levels is still a long way off.
"In the meantime many businesses are living in a Rusting Britain, with equipment
that doesn’t meet their needs for the recovery.
“We believe the Government could do more to help businesses to invest by
streamlining accounting and taxation regulation and by extending its programme
of small business loans risk support to include asset finance.
"This would build on the Government’s recognition of the importance of asset
finance in its ‘Financing a Private Sector Recovery’ Green Paper.”
Source: Credit
Control Journal
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