FLA urges Budget action to unlock private finance for UK investment

The Government should use the forthcoming Budget to mobilise more private finance for productive investment, improve SME access to funding and help households reduce energy and motoring costs, according to the Finance & Leasing Association (FLA).

In its Budget submission, the FLA has called for measures designed to connect private capital with businesses seeking to invest in machinery, vehicles and technology, arguing that the finance industry can play a significant role in delivering the Government’s investment, productivity and growth ambitions.

FLA members already finance 34.3% of UK investment in machinery, equipment and vehicles. In 2025, members provided £163 billion of new finance to UK households and businesses, including £40.3 billion of asset finance, of which £24.4 billion supported SMEs.

Central to the FLA’s proposals is the creation of a new Productive Finance Partnership, led by the British Business Bank, which would seek to bring more institutional and private capital into specialist SME finance.

With asset finance at its core, the proposed partnership would connect long-term pools of capital with specialist lenders financing productive assets for SMEs across the UK, helping translate private investment into economic activity in local communities.

“The Government has made increasing investment and productivity central to its growth agenda. The Budget is an opportunity to turn that ambition into investment in businesses and communities across the country.

“FLA members already finance more than a third of UK investment in machinery, equipment and vehicles. They provide the finance that allows businesses to invest in the assets and technology they need to modernise, increase capacity and become more productive.

“With public finances constrained, the question is how we get more private capital flowing into that productive investment. Our proposed Productive Finance Partnership would bring together the British Business Bank, institutional investors and specialist lenders to help make that happen.”

Improving SME access to finance

Alongside increasing the supply of capital, the FLA wants to make it easier for SMEs to identify and access appropriate sources of finance.

Its submission proposes an industry-funded Ready for Finance service that would help SMEs understand their financing requirements, assess their readiness for funding and determine what steps they need to take next.

Amarasekara said: “We also need to make it easier for SMEs to access the finance that is already available. Ready for Finance would be an industry-funded way of helping businesses understand what finance they need, whether they are ready for it and what they need to do next.”

The FLA argues that improving access to finance is not simply about increasing the amount of capital available. Businesses must also be able to navigate the funding market and turn available finance into investment in productive assets.

Its wider Budget recommendations include increasing business investment in productive assets and protecting lenders’ capacity to finance and invest.

Private finance to support lower household costs

The FLA is also calling for greater use of private finance to help households and businesses reduce their costs.

This includes using private finance alongside the Warm Homes Plan to support investment in energy-saving measures, as well as establishing a coherent approach to electric vehicle taxation that maintains the affordability of the transition to electric motoring.

“The same principle applies to household finances,” Amarasekara said. “Private finance can help people invest in measures that permanently reduce their energy bills and access lower-cost motoring, but Government policy needs to support rather than frustrate those choices.”

On electric vehicles, the FLA is seeking an approach that supports an affordable transition while providing sufficient certainty for lenders to continue investing in the market.

Turning capital into growth

The FLA’s submission comes as the Government looks to increase investment and productivity while facing constraints on the public finances.

The association argues that mobilising existing pools of private capital and ensuring they can reach SMEs and households could increase productive investment without relying solely on additional public expenditure.

Amarasekara said: “The Budget should therefore focus on a simple objective: creating the conditions for finance to flow into the businesses, assets and technologies that will raise living standards and productivity.

“If we can mobilise more private capital, widen access to finance and give lenders the certainty to invest, the finance industry can help turn the Government’s growth ambitions into economic activity in every part of the country.”

The FLA’s Budget submission calls for action across six areas: mobilising private capital for productive SME investment; increasing investment in productive assets; improving SME access to finance; reducing household energy and business costs through private finance; supporting an affordable transition to electric vehicles; and protecting the industry’s capacity to lend and invest.