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Press Release

Government needs to extend green capital allowances to leases

15 July 2009

Responding to the Government’s UK Low Carbon Transition Plan published today, FLA Head of Asset Finance, Julian Rose, said:

“The Transition Plan is a step forward for a low carbon economy, but more focus is needed on making electric vehicles, solar panels, smart meters, and other equipment affordable to millions of consumers and businesses. The technology to reduce carbon in homes and businesses already exists. The challenge now is to identify new funding models, so that the levels of take-up can grow exponentially.

“Leasing is a natural funding model for low-carbon technology, because it allows users to pay for new equipment as they enjoy the cost savings from using it. The leasing industry needs tax breaks and other Government backing so that we can offer great deals on low carbon equipment”.

Notes

Asset finance is the provision of finance to the business and public sectors, including sole traders, partnerships, companies, local government and health services, to assist in the purchase of assets. This mainly occurs via hire purchase and leasing.

Asset finance (leasing and hire purchase for business)

· Funds almost 28% of all fixed capital investment business capital investment, other than property and own-account software.

· Provides finance to around 20% of all SMEs, and around 33% of those SMEs who seek external funding

· Particularly important in manufacturing, agriculture and transport sectors, and in the North East, North West and South West.

In 2008 FLA members financed £89 billion of new business. Almost £30 billion was provided to the business sector and UK public services, representing almost 28% of all fixed capital investment in the UK last year (excluding real property and own-account software).



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Finance & Leasing Association

Finance & Leasing Association

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