Only 24% of small and medium sized enterprises (SMEs) are using asset finance to fund their equipment purchases, data from Time Finance has revealed.
Surveying 500 SME decision makers from across the UK, Time Finance’s Finance Apathy Survey found that while general awareness of asset finance was high.
With 79% of businesses familiar with the solution, 76% of businesses still chose to opt out of its benefits.
The independent lender’s research, carried out in partnership with Censuswide, also found that only 24% of businesses were utilising asset finance to fund their growth, and 21% were not aware of the solution or its benefits at all.
Despite these figures, recent data by the Finance and Leasing Association (FLA) found that total asset finance new business grew by 3% to reach a record level of £39.7bn in 2024.
Steve Nichols, managing director of asset finance at Time Finance, said: “What’s clear to see from our recent data is more businesses are aware of asset solutions than we might realise, but we are seeing a gap between people’s awareness and their use of this product, particularly for financing new equipment.
“It’s important to understand why that gap is there. With over half of businesses opting out of Asset Finance, the concern is that they’re also missing out on the potential for growth.
“With the Government’s recent Budget relying heavily on business taxation to raise £40bn in extra revenues, many are operating without huge cash reserves meaning that asset finance has never been more important for UK businesses.”
Nichols added: “While the FLA figures point towards growth in overall asset finance over the past year, the detail of their data shows growth in vehicle finance but a slowing momentum in plant and machinery and a decline in commercial new vehicle finance.
“Their data suggests a third of UK investments in machinery, equipment and vehicles were provided through the asset finance industry in 2024, which is positive and shows there is appetite amongst businesses.
“That said, as momentum in equipment purchases slows, we need to help SMEs understand the value in using asset finance for plant and machinery purchases.
“For so many businesses there is a want to make these investments, but without the capital their options are limited. In scenarios such as these, asset finance allows businesses to access equipment in an affordable and manageable way.”
