The Finance & Leasing Association (FLA) has reported that asset finance new business, including leasing and hire purchase, rose by 11% in March 2025 compared with March 2024.
In the first quarter of 2025, new business was 5% higher than in the same period in 2024.
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FLA’s research and chief economist director Geraldine Kilkelly said that despite a challenging economic environment, the asset finance market delivered a strong performance in the first quarter of 2025.
Plant and machinery finance saw an 8% year-on-year increase in March, reaching £799m ($1.06bn).
It posted a modest 2% increase during the quarter, with a 3% rise over the year.
Commercial vehicle finance grew 3% across all periods, amounting to £1.15bn in March and £11.06bn in the last 12 months.
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By GlobalDataIT equipment finance demonstrated growth, with a 5% increase in March, a 22% rise over the quarter, and a 16% year-on-year surge, totalling £1.33bn over 12 months.
March also saw a notable increase in asset finance lending to SMEs, which grew by 16% compared to the same month in 2024.
Meanwhile, lending to larger businesses increased by 5%, reflecting a broad-based recovery in the market.
Kilkelly said: “The asset finance market reported its highest level of new business in March for two years and the second highest monthly total on record. The recovery in the business new car finance sector was supported by the issue of a new registration plate and customers bringing forward purchases ahead of increases in vehicle excise duty from April 2025.
“Further cuts in interest rates should help those businesses in a position to invest as they focus on driving growth through the use of greener assets and more efficient technology. The asset finance industry provides significant support to businesses of all sizes, funding a third of UK investment in vehicles, machinery and equipment in 2024.”
In February, the FLA reported a 1% growth in total asset finance new business compared to February 2024, with IT equipment finance and plant and machinery finance sectors contributing to this growth.
In the first two months of 2025, asset finance new business was 2% higher than the same period in 2024, indicating a positive trend for the sector.
