Only 24% of UK SMEs are using asset finance to fund equipment purchases, despite broad awareness of the product, according to new research from Time Finance.
The findings, based on a survey of 500 SME decision-makers, suggest a gap between knowledge and adoption of alternative finance solutions.
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The study, conducted with Censuswide, found that while 79% of SMEs are familiar with asset finance, three-quarters are not making use of it. Additionally, 21% of respondents said they were unaware of asset finance or its benefits.
Steve Nichols, Managing Director of Asset Finance at Time Finance, said the results highlight “a gap between people’s awareness and their use of this product, particularly for financing new equipment.” He noted that many SMEs, facing increased tax burdens from the latest UK Budget, may lack the cash reserves to fund growth through traditional means, making asset finance a “crucial” alternative.
The survey results come as data from the Finance and Leasing Association (FLA) shows overall asset finance new business grew by 3% in 2024, reaching a record £39.7 billion. However, sector-specific trends reveal mixed performance: car finance rose by 14%, while plant and machinery finance increased by just 4%, and commercial vehicle finance declined by 4%.
Nichols emphasised that while the FLA data suggests “one-third of UK investments in machinery, equipment, and vehicles were provided through the asset finance industry in 2024,” the slowing momentum in plant and machinery purchases signals a need for further education on the benefits of asset finance.
“As a specialist tool, asset finance enables businesses to expand operations or introduce new product lines in an affordable and manageable way,” he added.
