Europe’s asset finance sector regains confidence and consolidates in H2 2025

The next phase of European asset finance is taking shape. Asset Finance Connect’s latest European Asset Finance Outlook H2 2025 reveals an industry regaining confidence following a subdued first half of the year, amid falling interest rates, easing inflation, and early signs of economic renewal across the eurozone.

The full report — available to download now — offers an in-depth analysis of confidence levels, funding trends, digital innovation, and sustainability across Europe’s asset finance sector.

Download your copy of the full report by completing the form on the right.

Key findings include:

• Cautious optimism returns: After a subdued start to 2025, confidence is slowly rebuilding. AFC’s latest survey shows that 43% of executives expect lower borrowing costs to boost new business volumes over the next six months, even as profitability remains under strain.
• Consolidation on the horizon: With the European Central Bank easing rates three times this year and asset values stabilising, mergers and acquisitions are firmly back on the agenda. Normalised valuations and reduced liquidity are creating fresh opportunities for strategic takeovers.
• Captives and SMEs drive momentum: Manufacturer captives are leading on lending appetite, while SMEs are driving borrowing demand—particularly for technology-enabled and sustainability-linked assets.
• Digital transformation gains pace: AI and digital platforms are reshaping credit assessment, risk management, and remarketing. While adoption rates vary, technology investment is now central to competitiveness across the sector.
• Managing risk in uncertain times: Lenders remain alert to heightened risks. Nearly half expect an increase in bad debts and defaults, while one in three foresee a greater risk of fraud as economic conditions remain mixed.
• Sustainability—potential versus performance: Although 60% of executives see green finance as a major growth opportunity, 69% say it has yet to meet expectations. High asset costs and slow regulatory progress continue to hold back green lending, even as funders explore pay-per-use and second-life leasing models to drive circular value.
• Automotive challenges intensify: Europe’s automotive industry faces headwinds from weak new car demand, tariffs, and rising competition from Chinese OEMs. The shift to electric vehicles continues, but both passenger and commercial sectors remain behind pace to meet 2030–2035 EU emissions targets.

The AFC European Asset Finance Outlook H2 2025 captures a market in transition – balancing consolidation, innovation, and sustainability to position for long-term growth. As digital tools mature and funding costs fall, lenders across Europe are recalibrating for a more connected, data-driven, and sustainable future.