Asset finance market sees modest growth in February

New data released today by the Finance & Leasing Association (FLA) shows that total asset finance new business—mainly leasing and hire purchase—rose by 1% in February 2025 compared to the same month last year. Overall, new business for the first two months of 2025 was up 2% year-on-year.

Breaking it down by sector, IT equipment finance saw a strong increase of 35% in February, while plant and machinery finance grew by 2%. However, the commercial vehicle finance sector reported a 3% decline compared to February 2024.

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, commented: “The asset finance market reported further growth in February but at a slower pace than in recent months.

“New asset finance lending to SMEs and larger businesses both grew by 2% compared with February 2024.”

She also highlighted growing concerns over the broader economic climate: “The US administration’s tariff hikes have weakened an already soft economic outlook. Investment will undoubtedly suffer as businesses face increased uncertainty about demand, higher taxes and higher than expected funding costs. Those that are investing are focusing on more efficient technology which asset finance providers play a key role in funding.”

	Feb 2025	% change on prev. year	3 months to Feb 2025	% change on prev. year	12 months to Feb 2025	% change on prev. year
Total FLA asset finance (£m)	2,940	1	9,323	4	39,825	2
Total excluding high value (£m)	2,819	1	8,781	3	37,815	2

Data extracts: By asset:
Plant and machinery finance (£m)	602	2	1,671	0	7,501	-1
Commercial vehicle finance (£m)	806	-3	2,507	7	11,027	9
IT equipment finance (£m)	105	35	402	37	1,328	13
Business equipment finance (£m)	119	-14	385	-6	1,672	-10
Car finance (£m)	937	-2	3,033	-4	13,184	-2
Aircraft, ships and rolling stock finance (£m)	57	144	98	48	349	7
By channel:
Direct finance (£m)	1,304	3	4,064	2	17,090	0
Broker-introduced finance (£m)	634	-12	1,829	-6	8,447	1
Sales finance (£m)	881	8	2,888	10	12,278	5
By product:
Finance leasing (£m)	190	-20	706	-12	3,119	-10
Operating leasing (£m)	762	4	2,489	6	10,202	7
Lease/hire purchase (£m)	1,561	0	4,643	3	20,748	1
Other finance (£m)	329	27	1,082	5	4,278	5