Asset finance is set to drive the strongest demand for SME funding over the next 12 months, according to research from Asset Advantage.
In the latest survey, 72% of commercial brokers said they expect asset finance to be the primary driver of business funding demand in the coming year.
A further one in four brokers anticipate notable interest in business acquisition and expansion loans.
By contrast, areas such as invoice finance, selected by 22% of respondents, and property-related commercial finance, selected by 17%, are expected to see lower demand.
The findings indicated rising appetite among SMEs for growth-focused lending, with firms prioritising investment in new equipment, expansion plans and acquisition opportunities despite challenging market conditions.
The results align with recent Finance and Leasing Association (FLA) data showing an 11% year-on-year rise in total asset finance new business in September, while Office for National Statistics (ONS) figures show domestic M&A activity reaching £5.3bn in Q3 2025, almost £2bn more than the previous quarter.
Nearly 60% of brokers surveyed also reported an increase in client demand for funding to buy a business or complete a management buy-out.
Asset Advantage recently expanded its business loans proposition with two new products: a CapEx Term Loan for non-standard assets such as specialist equipment, soft assets, fit-outs and refurbishments, and a Business Acquisition loan for clients purchasing a business, buying out partners or undertaking a management buy-in.
The lender provides asset finance via hire purchase and finance lease, as well as business loans starting at £75,000 and available up to £500,000.
Loans are used both for asset investment and acquisitions, with the company remaining flexible on sector and asset type where affordability and risk are robust.
Gary Thompson (pictured), sales director at Asset Advantage, said: “Commercial brokers are telling us that there is growing momentum among SMEs.
“Rather than seeking short-term fixes with inappropriate cash-flow loans, they are actively pursuing funding that helps them grow – and asset finance is top of their list in the coming year.
“Alongside this, SMEs are looking to grow through expansion and are therefore prioritising funding for business acquisitions. This certainly mirrors our current business levels and expectations for the year ahead.”
He added: “While the findings are certainly encouraging, delivering on this demand relies on flexible, growth-focused funders – those who are willing to understand the business behind the case and ready to support their investment and expansion plans.
“Rather than rigid processes and restrictive appetites, we need an open-minded and pragmatic approach to lending to really give brokers the tools and support they need. As we head into 2026, this remains our priority as we help brokers and their SME clients realise these growth ambitions.”
