Asset finance new business rose 3% in July 2025 compared to the same month in 2024, according to the Finance & Leasing Association (FLA).

In the first seven months of 2025, new business figures were 1% higher than in the equivalent period of the previous year.

The business new car finance and IT equipment finance sectors showed notable growth in July, with increases of 10% and 31% respectively, compared to July 2024.

In contrast, the plant and machinery finance sectors saw a 3% decrease in new business over the same timeframe.

In July 2025, FLA members provided a total of £3.49bn ($4.73bn) in asset finance.

Over three months leading to July, the total reached £10.17bn, reflecting a year-on-year increase of 1%.

Over a 12-month span to July, the total asset finance value was £40bn, also indicating a 1% annual growth.

Excluding high-value deals, the market expanded slightly faster, with July volumes increasing 3% to £3.31bn.

For the quarter, this segment reached £9.72bn (a 2% rise), and the annual figure increased by 2% to £38.31bn.

By asset type, excluding high-value items, plant and machinery finance saw steady growth, up 4% in July to £702m, 2% over the quarter, and 1% annually to £7.55bn.

Commercial vehicle finance declined by 3% in July and 1% over the quarter but grew 4% over the year to reach £11.01bn.

As noted, IT equipment finance rose 31% in July to £106m, but dropped 14% over the three months.

Despite this, annual volumes remained positive, increasing 1% to £1.22bn.

Business equipment finance decreased by 9% in July but recorded 6% growth over the quarter; it declined 1% annually to £1.7bn. 

Car finance saw a 7% increase in July, 3% growth over the quarter, but a 2% drop over the year to £13.50bn.

Regarding distribution channels, direct finance increased by 2% in July to £1.44bn, showing quarterly growth of 7%.

The 12-month total reached £17.54bn, up 2%.

Broker-introduced finance rose by 7% in July but fell by 2% over the three months, with annual volumes remaining unchanged at £8.46bn.

Sales finance experienced modest growth, up 3% in July, remaining flat over the quarter, and increasing 2% over the year to £12.30bn.

FLA director of research and chief economist Geraldine Kilkelly said: “The asset finance market made a positive start to the third quarter of 2025 as new business grew for a second consecutive month in July.  In the 12 months to July 2025, new business reached more than £40bn.

“New lending to firms in the services sector increased by 7% in July, which reflected the recent improvement in business activity within this sector. The industry supports businesses of all sizes to invest and grow, and in July, new lending to both SMEs and larger businesses increased by 4%.”

In terms of financial products, finance leasing grew by 7% in July to £270m but saw a 12% decline over the quarter and an 11% decrease over the year to £2.97bn.

Operating leasing sustained growth, up 4% in July, 2% over the quarter, and 4% annually to £10.48bn.

Lease and hire purchase volumes fell by 2% in July, remained unchanged over the quarter, and showed no change over the year at £20.66bn.

Other types of finance rose by 6% in July, surged 25% over the quarter, and grew 7% annually to £4.52bn. 

Kilkelly added: “In the run-up to the Autumn Budget, we are expecting the Chancellor to announce a range of measures to boost productivity growth through raising business investment levels. The asset finance industry funds almost a third of UK investment in equipment, machinery and vehicles and therefore we urge the Government to streamline the capital allowances regime to include leasing in full expensing and create a new, targeted green tax allowance.”