Asset finance UK new business rises 5% in February

New business in the UK asset finance sector recorded modest growth in February 2026, highlighting continued demand for funding despite a more challenging economic backdrop.

Figures released by the Finance & Leasing Association (FLA) show that total asset finance new business – primarily leasing and hire purchase – increased by 5% compared with February 2025. However, the broader picture remains mixed, with new business in the first two months of the year running 1% below the same period last year.

Growth in February was driven by strong performances in key equipment sectors. Finance for IT equipment rose by 19%, while plant and machinery finance surged by 25% year-on-year. The commercial vehicle finance market also posted a solid gain, with new business up 6% compared with February 2025.

The data also revealed a divergence between business sizes. Lending to small and medium-sized enterprises (SMEs) grew by 13% in February, suggesting smaller firms are continuing to invest in essential assets. In contrast, new lending to larger businesses declined by 10% over the same period, indicating more cautious investment behaviour among bigger corporates.

“February’s data show solid performances in machinery and equipment finance, underpinned by increased levels of new business across key sectors such as manufacturing, agriculture and construction,” she said. “These trends reinforce the important role asset finance continues to play in supporting business investment, particularly as firms focus on maintaining and enhancing productive capacity.”

However, Kilkelly warned that the outlook for the UK economy has become more uncertain, with geopolitical tensions — particularly the ongoing conflict in the Middle East — expected to weigh on confidence and financial conditions in the months ahead.

Despite these headwinds, the asset finance sector remains a significant pillar of business investment. FLA members funded 34.3% of UK investment in machinery, equipment and vehicles in 2025 – the highest share since 2019 – underlining the industry’s central role in supporting economic activity.

	Feb  2026	% change on prev. year	3 months to Feb 2026	% change on prev. year	12 months to Feb 2026	% change on prev. year
Total FLA asset finance (£m)	3,012	5	9,300	0	40,276	1
Total excluding high value (£m)	2,834	3	8,731	0	38,358	2
Data extracts: By asset:
Plant and machinery finance (£m)	754	25	1,971	17	7,998	5
Commercial vehicle finance (£m)	847	6	2,419	-4	10,696	-4
IT equipment finance (£m)	120	19	366	-6	1,281	-2
Business equipment finance (£m)	128	6	415	7	1,820	8
Car finance (£m)	851	-5	2,896	-3	13,290	1
Aircraft, ships and rolling stock finance (£m)	39	-31	77	-21	406	16
By channel:
Direct finance (£m)	1,233	-1	3,980	0	17,416	3
Broker-introduced finance (£m)	721	14	2,050	12	8,846	5
Sales finance (£m)	880	0	2,702	-6	12,096	-1
By product:
Finance leasing (£m)	212	11	779	10	3,029	-3
Operating leasing (£m)	712	1	2,273	-6	10,037	-1
Lease/Hire purchase (£m)	1,516	-3	4,566	-2	20,583	-1
Other finance (£m)	504	56	1,351	27	5,289	26