Asset finance new business grew by 1% in February 2025 compared with the same month in 2024, according to figures released by the Finance & Leasing Association (FLA).
This represents a continuation of growth but at a slower pace than seen in recent months in the UK market.
In the first two months of 2025, new business was 2% higher than in the same period in 2024, showing sustained if modest growth in the sector.
The IT equipment finance segment saw particularly strong performance with new business up by 35% in February compared to the previous year, while plant and machinery finance reported a 2% increase.
The commercial vehicle finance sector bucked the overall positive trend, reporting a 3% decrease in new business compared with February 2024.
This downturn in vehicle finance comes as businesses evaluate their investment priorities in a challenging economic environment.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “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.
“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.”
