£37.6bn of finance supports growth across Northern England

Finance providers delivered £37.6 billion of new finance to businesses and households across Northern England in 2025, highlighting the role private capital can play in supporting regional investment and productivity, according to a new paper from the Finance & Leasing Association (FLA).

The FLA’s The Engine Behind Northern Growth report argues that narrowing the North’s productivity gap will require greater business investment alongside improved infrastructure, access to finance and a regulatory environment that supports private capital.

Finance provided by FLA members represents a particularly significant share of economic activity across northern regions. In 2025, new finance was equivalent to an estimated 8.2% of regional gross value added (GVA) in the North East, 7.7% in Yorkshire and the Humber and 6.6% in the North West, compared with 6.0% across the UK as a whole.

FLA members provide funding for businesses investing in machinery, vehicles, technology, equipment and clean energy, while motor and consumer finance supports access to vehicles and other goods.

Shanika Amarasekara MBE, chief executive of the FLA, said: “Growth does not come from a single policy lever pulled in Whitehall. It happens when businesses are empowered to invest in what I call the real economy.

“Much of what our members finance is the practical investment businesses make every day through machinery, vehicles, equipment and software. Crucially, these are the assets businesses use to become more productive.

“The North does not need another isolated answer to its growth problem. It needs a policy environment that is calibrated towards helping businesses invest, expand and compete, backed by the infrastructure and access to finance that make those decisions possible.”

The report provides examples of how finance is supporting investment across the regions. In Hull, funding is helping SMEs install rooftop solar systems, with participating businesses saving an average of more than £20,000 a year on energy costs.

In the North West, asset finance enabled an independent hospitality business to purchase specialist equipment and open a second café, creating jobs while allowing the company to preserve cash flow for further investment.

The FLA also points to the relationship between access to motor finance and economic participation. In Greater Manchester, individual underwriting enabled a customer to obtain a vehicle and remain in employment.

The paper identifies five areas where the FLA believes Government and industry could support further growth: modernising consumer credit regulation; delivering proportionate and predictable regulation; encouraging investment in productive assets; improving transport connectivity; and incorporating financial inclusion into the Government’s growth agenda.

It also argues that transport connectivity should be considered part of economic policy rather than solely infrastructure policy, with poor connections limiting businesses’ access to workers, customers and markets and potentially reducing returns on private investment.

Amarasekara added: “Government cannot deliver that alone, and neither can industry. But if both are willing to work together, there is an opportunity to turn more of the North’s existing economic strength into higher productivity and stronger growth.”