UK asset finance new business falls 6% in January

New business in the UK asset finance market declined by 6% in January 2026, according to figures released today by the Finance & Leasing Association (FLA), highlighting a cautious start to the year for business investment.

The data, which covers primarily leasing and hire purchase activity, shows that while monthly performance weakened, the broader trend remained relatively stable. Over the 12 months to January 2026, total new business was 1% higher than in the same period a year earlier, suggesting modest underlying growth despite recent headwinds.

Sector performance was mixed. Business equipment finance recorded a 2% increase in new business compared with January last year, while the plant and machinery finance segment saw stronger growth of 13%. In contrast, the commercial vehicle finance sector experienced a sharp 15% decline, indicating reduced demand for transport-related investment.

Lending patterns also diverged by business size. New asset finance lending to small and medium-sized enterprises (SMEs) rose by 3% year-on-year, continuing a positive trend seen in the latter half of 2025. However, lending to larger businesses fell significantly, down 19% over the same period.

“The asset finance market saw further growth in new lending to SMEs at the start of 2026, extending the momentum built in the second half of last year, even as conditions across the wider market remained more subdued,” she said.

She warned, however, that the broader economic environment remains challenging.

“The economic outlook has clearly toughened for businesses. Geopolitical tensions are keeping inflationary pressures elevated and delaying the prospect of lower interest rates, and many firms are holding back on major investment decisions as uncertainty persists.

“Businesses are prioritising resilience over expansion, and a meaningful recovery in investment will depend on clearer signals on inflation, interest rates and the broader economic outlook.”

	Jan  2026	% change on prev. year	3 months to Jan 2026	% change on prev. year	12 months to Jan 2026	% change on prev. year
Total FLA asset finance (£m)	2,750	-6	9,612	1	40,144	1
Total excluding high value (£m)	2,695	-5	9,014	1	38,275	2
Data extracts: By asset:
Plant and machinery finance (£m)	511	2	1,823	10	7,849	4
Commercial vehicle finance (£m)	711	-15	2,537	-5	10,649	-5
IT equipment finance (£m)	77	-34	322	-10	1,258	-2
Business equipment finance (£m)	138	13	419	2	1,813	6
Car finance (£m)	935	-5	3,153	0	13,332	1
Aircraft, ships and rolling stock finance (£m)	27	236	73	7	424	34
By channel:
Direct finance (£m)	1,261	-6	4,306	4	17,423	2
Broker-introduced finance (£m)	624	5	2,014	9	8,759	3
Sales finance (£m)	811	-11	2,693	-9	12,092	-1
By product:
Finance leasing (£m)	192	-2	813	6	3,007	-5
Operating leasing (£m)	677	-14	2,501	-3	10,024	-1
Lease/Hire purchase (£m)	1,423	-5	4,617	-2	20,629	-1
Other finance (£m)	403	12	1,246	25	5,108	24