New lending via asset financing has increased by 9.7% annually, totalling £31bn, with the service and construction industries driving this growth, according to market analysis by Sirius Property Finance.
Sirius Property Finance analysed total asset finance lending, the industry sectors utilising it to the greatest extent, and the most common assets financed.
Last year, commercial vehicles were the most common asset acquired by businesses, accounting for 29% of new lending, followed by company cars (27%) and plant and machinery equipment (23%).
In 2022, there was £34bn in new lending, a 9.7% increase on the previous year.
The services sector was the driving force behind this uptick, accounting for 65% of total new lending last year, with the construction sector accounting for the second largest proportion at 10%.
The agricultural and manufacturing sectors also accounted for a sizeable amount of activity, at 8% of total lending apiece.
Nicholas Christofi, managing director of Sirius Property Finance, said: “Asset financing is a great way to support company growth without the need of an outright cash lump payment.
“Whether it’s the lease of equipment, a finance lease, an operating lease or contract hire, there are numerous ways asset financing can help a business to expand and it’s a more versatile and often more cost-effective route when compared to other financing options.”
He continued: “In the current economic climate it’s also growing in popularity, allowing many businesses to plan for the future at a time when they may not have the disposable income to do so.
“This means that when the economic picture does start to brighten, they are poised to hit the ground running, rather than playing catch up with their competitors.”
