Allica CEO Richard Davies in keynote interview at AFC Conference

At the Asset Finance Connect (AFC) UK Summer Conference on 3^rd June at County Hall in London, attendees will be debating how to increase asset finance lending to SMEs. To inform the debate, AFC will release key research conducted with 15 of the UK’s leading asset finance lenders who are AFC corporate members who attended an AFC workshop at Shoosmiths London office in April.

The results will be considered in three conference sessions each focused on important elements of the debate: how to increase lenders’ appetite to lend; pain points in the SME lending customer journey; and opportunities to increase lending to market segments which are currently underserved (including lending to start-ups, women, and ethnic minority businesses).

“This is an important piece of research which was sparked by the UK Government’s recent consultation paper on the topic. SMEs are important to the UK Government because they provide a rapid way to stimulate growth in the economy, one of five key priorities which the Government set out in their 2024 manifesto,” said Edward Peck, founder of Asset Finance Connect.

“Asset Finance is one of the most effective tools in the SME lending toolbox. The FLA estimates asset finance contributes £23bn of lending to SMEs. The industry needs to both communicate its current and important role to Government and to communicate out how the industry can collaborate with Government efforts through increasing the level of profitable lending to the sector. It is also important that any proposed Government intervention will complement rather than compete with the commercial market.

“Challenger banks have been highly successful in increasing their market share among SMEs, hitting an all-time high of 60% in 2024/25 and winning business against the big 4, according to figures released by the British Business Bank. Yet industry practitioners are also aware that there have been some notable bank departures from the asset finance market including Hampshire Trust Bank; Shawbrook Bank has paused asset finance lending; ABN Amro has withdrawn from the UK; and Societe Generale recently sold its equipment finance division to BPCE.

“A key challenge for banks serving the SME market is that lending to small businesses is often viewed as high risk and expensive to serve: it does not stack up in the competition for a share of each bank’s capital; there are regulatory challenges including a planned increase in the capital requirements for lending to SMEs which will make lending more expensive; and there may be a growing perception among investors in the sector that changes need to be made to the industry’s go-to-market strategy to reduce future regulatory risk, whatever the results of the Supreme Court appeal on auto finance commission.”

Other participants in the SME stream include Richard Bearman, co-chief banking officer at the British Business Bank; Jim Higginbotham, CEO, NACFB; and Anna Roughley, deputy CEO, Lending Standards Board.

Allica Bank is a leading UK challenger bank known for leveraging cutting-edge digital technology to deliver tailored financial solutions and a seamless experience for established SMEs, positioning itself as a tech-driven alternative to traditional high street banks. Its asset finance division specialises in providing flexible funding for business-critical equipment, supporting SMEs’ growth and investment needs with rapid decision-making and personalised service. Allica recently announced a near doubling of profits and £3bn of lending.

The AFC Summer Conference will ask lenders and intermediaries from auto finance, equipment finance and asset finance to consider whether the industry needs to rethink its go-to-market approach to achieve better outcomes both for the industry and for its customers.

The asset finance stream will focus on how to increase SME lending; the auto finance stream will consider the results of an additional workshop scheduled for the end of April which focuses on what auto finance lenders need to do now to be ready for the Supreme Court decision expected in July, and the various options for redress which may follow; and the equipment finance stream will consider changes in alternative channels to market including embedded finance and emerging partnership arrangements between lenders, other service providers to an ecosystem and manufacturers.

The conference will also extensively consider the emerging opportunities to leverage AI in the auto, equipment and asset finance industries through a series of workshops designed to focus on the tech, operational and strategic implications of this fast-moving part of the tech world on our industry.

To find out more and book your place at the AFC UK Summer Conference on 3rd June at County Hall, London, visit the conference website.