UK Asset Finance Statistics: How SMEs Fund Equipment, Vehicles & Machinery

In 2025, asset finance stayed one of the most practical ways for UK SMEs to fund the things that make money, vehicles, machinery, IT, and equipment, without tying up cash.

• Record-year pace: The Finance & Leasing Association (FLA) said providers were on track to reach a record almost £41 billion of new business in 2025.
• Market still growing: In the ten months to October 2025, new business was 2% higher than the same period in 2024. Source: FLA, October 2025
• SME usage remains meaningful: In 2024, 10% of SMEs reported using leasing, hire purchase or vehicle finance (annual view). Source: SME Finance Monitor (full report)

What is "asset finance" for SMEs?

Asset finance is funding secured on a business asset, like a van, a machine tool, a piece of plant, or IT equipment. Instead of paying upfront, the business repays over time, often using the asset to generate the cash to repay.

The British Business Bank explains why SMEs use it: it can ease cash flow pressure, reduce the need for large upfront payments, and support investment in "business-critical" assets such as machinery, equipment, and vehicles. Small Business Finance Markets 2024/25 (Report 2025 PDF)

Leasing vs hire purchase, the simple difference

• Leasing: You pay to use the asset for a fixed term. Ownership depends on the contract type.
• Hire purchase (HP): You pay over time, and ownership typically transfers at the end. The British Business Bank notes HP is traditionally common where the business wants to own the equipment at the end.

UK asset finance market in 2025: the numbers SMEs should know

The FLA's monthly "asset finance new business" releases provide a clear read on direction of travel through 2025.

October 2025: growth, and a record-year signal

• October 2025 new business was £3,683m, up 7% year-on-year.
• In the ten months to October 2025, new business was 2% higher than the same period in 2024.
• The FLA said providers were on track to reach almost £41bn of new business in 2025.

How that October 2025 funding split across assets

For SMEs comparing "what gets funded most easily", it helps to see where the volume is.

• Car finance: £1,253m, up 10% year-on-year (excluding high value).
• Commercial vehicle finance: £923m, down 6% year-on-year (excluding high value).
• Plant and machinery: £669m, up 6% year-on-year (excluding high value).
• IT equipment: £106m, up 23% year-on-year (excluding high value).
• Business equipment: £152m, up 2% year-on-year (excluding high value).

What happened earlier in 2025?

2025 was not a straight line. Different months were driven by different assets, and by high-value deals.

• January 2025: total new business £2,945m, up 2% year-on-year, with IT equipment up 43% and commercial vehicles up 10% (month-on-month comparison vs January 2024). Source: FLA, January 2025
• March 2025: total new business £4,243m, up 11% year-on-year, and Q1 2025 was 5% higher than Q1 2024.
• April 2025: total new business fell 7% year-on-year, but the first four months of 2025 were still 2% higher than the same period in 2024. The FLA noted that high-value deals weighed on growth. Source: FLA, April 2025
• July 2025: total new business £3,497m, up 3% year-on-year, and the seven months to July were 1% higher than the same period in 2024.
• September 2025: total new business £3,883m, up 11% year-on-year, and the nine months to September were 2% higher than the same period in 2024. September 2025

How many SMEs use asset finance, and who uses it most?

The SME Finance Monitor helps answer the "who" question. It is survey-based, so it reflects what SMEs report using, not lender volumes.

External finance in 2025: steady, but cautious

In the SME Finance Monitor Q2 2025 summary, 44% of SMEs were using external finance (YEQ2 2025). It was "little changed" since 2023 (46%), and it varied by size, rising to 65% for firms with 10–49 employees.

The same summary also reports that 38% of SMEs in YEQ2 2025 thought it could be difficult for a business like theirs to get finance.

Asset finance usage in 2024, a useful baseline for 2025 planning

The SME Finance Monitor full report (covering 2024) shows:

• 45% of SMEs used any external finance (YEQ4 2024, "use any now").
• 10% of SMEs used leasing or hire purchase (YEQ4 2024), and this rose to 30% among SMEs with 10–49 employees.
• Looking annually, leasing, hire purchase or vehicle finance sat at 10% in 2024 (all SMEs).

For 2026 searches, this size pattern matters. Mid-sized SMEs (especially 10–49 employees) are often the "investment" band. They are more likely to need kit, and more likely to use multiple finance tools.

Vehicles vs machinery vs equipment: what the 2025 data suggests

Vehicles still dominate monthly volumes

In October 2025 alone, car finance (£1,253m) and commercial vehicle finance (£923m) together outweighed plant and machinery (£669m).

But direction matters too. In October 2025, commercial vehicle finance was down year-on-year, while car finance and plant and machinery were up.

Plant and machinery shows steady, not explosive growth

In the twelve months to October 2025, plant and machinery finance totalled £7,638m (excluding high value), up 1% year-on-year.

That looks like "maintenance and targeted upgrades" rather than a boom. If you are planning for 2026, it points to a market that rewards strong business cases and clear payback, not vague expansion plans.

IT equipment can spike fast

IT equipment can be more volatile. For example, the FLA reported IT equipment finance up 43% in January 2025 (year-on-year, that month).

For 2026, that matters because IT refresh cycles are shorter than plant cycles. Leasing can match those cycles better than buying outright.

Bank vs non-bank funding, and why SMEs should care in 2026

Asset finance is not just "banks". The British Business Bank reports that the share of asset finance provided by non-bank lenders stood at 37% in 2024, unchanged on 2023.

For 2026 planning, the practical takeaway is simple: your best offer may come from a specialist, and it is worth comparing. That is especially true if your asset is niche, your cash flow is seasonal, or you want structure around maintenance and upgrades.

Regional signal: leasing and vehicle finance usage can swing

Demand, confidence, and lender appetite vary by region. The British Business Bank report notes the share of smaller businesses using leasing, hire purchase, or vehicle finance in the North East fell to 7% in H1 2024 from a peak of 23% in H2 2023. It also states the UK average was 12%.

This does not mean "the North East hates asset finance". It signals that local conditions can change quickly. For 2026, treat regional chatter as a prompt to check multiple lenders and brokers, not as a final answer.

Why SMEs choose asset finance instead of loans or cash

When an SME funds a machine or vehicle with asset finance, it often wants three things:

• Cash flow protection: spread cost over the life of the asset.
• Faster access to productive kit: buy now, earn now.
• Flexibility: upgrade when technology changes, especially with leasing.

And in the background sits a big macro point. The British Business Bank report cites that the FLA calculates as much as 40% of business investment has been funded by asset finance.

What the 2025 trends imply for 2026

Here are evidence-led scenarios you can use when planning 2026 equipment, vehicles, or machinery funding. These are not forecasts, they are practical interpretations of what the 2025 data says.

Scenario 1: Steady growth continues, but deal quality matters

The FLA repeatedly frames the outlook as single-digit growth over the next 12 months, supported by the potential for interest rate cuts and investment in green assets and technology. Source: FLA, April 2025

If this plays out in 2026, SMEs with clear utilisation plans, documented maintenance history, and stable revenues should find asset finance still competitive, especially for mainstream assets.

Scenario 2: Vehicles stay active, but shifts within vehicles continue

In late 2025, car finance was growing year-on-year while commercial vehicle finance was down (October 2025). Source: FLA, October 2025

If you run a fleet, plan for more scrutiny on utilisation, mileage, and residual value assumptions. Build a story that shows how the vehicle supports revenue, not just convenience.

Scenario 3: More SMEs feel cautious, which affects demand

In the SME Finance Monitor Q2 2025 summary, 30% of SMEs saw mainly threats rather than opportunities (up from 2022), and political uncertainty and the economic climate were both cited as key barriers.

If caution stays high in 2026, approval is not the only issue. SMEs may self-select out of applying, or delay purchases. That can create negotiating opportunities for strong borrowers, especially on standard equipment lines.

Practical checklist: getting ready to fund equipment, vehicles, or machinery in 2026

• Match term to asset life: short-life IT should not be on a long repayment schedule.
• Prove utilisation: show how many jobs, deliveries, or production hours the asset unlocks.
• Separate "nice to have" from "must have": lenders prefer clear productivity improvements.
• Compare channels: the FLA reports meaningful volumes via direct, broker-introduced, and sales finance channels. For example, in October 2025 direct finance was £1,666m, broker-introduced £778m, and sales finance £1,001m.
• Know your product: in October 2025, "lease/hire purchase" was the largest product line by value at £1,858m that month.

Conclusion: key takeaways from the 2025 data

• FLA data shows asset finance stayed resilient in 2025, with new business up 2% year-to-date to October and a record-year pace of almost £41bn flagged by the industry.
• Vehicles (cars and commercial vehicles) still make up a large share of monthly volumes, but growth differs by sub-category.
• Survey data shows asset finance is widely used by SMEs, especially those with 10–49 employees, who report much higher use of leasing or hire purchase than the average SME.
• For 2026, the best strategy is to make the business case clear, shop around across provider types, and structure the term to the asset's working life.