The short answer: UK asset finance continued to grow in 2026. Finance & Leasing Association members reported £41.934 billion of business asset finance new business in the 12 months to August. They provided £27.5 billion to businesses for machinery, equipment and vehicles in the first eight months of 2026, including £17.2 billion to SMEs.
Equipment finance is commonly reported within the wider asset finance market, which primarily covers leasing and hire purchase used to fund machinery, vehicles, technology and other business assets. This page brings together the latest available figures from official and industry sources. It describes the evidence available on 23 October 2026 rather than predicting a single outcome for the year.
UK equipment finance: key figures
| Measure | Latest figure | Reporting period and source |
|---|---|---|
| Total asset finance new business | £41.934bn | 12 months to August 2026, FLA |
| Finance for machinery, equipment and vehicles | £27.5bn | First eight months of 2026, FLA |
| Of which, finance provided to SMEs | £17.2bn | First eight months of 2026, FLA |
| August business asset finance growth | 10% | August 2026 versus August 2025, FLA |
| SME asset finance in 2025 | £24.4bn | Full year 2025, British Business Bank |
| UK business investment | 1.8% quarterly growth | Q2 2026 revised estimate, ONS |
Download the figures: download the UK equipment finance data snapshot as a CSV. Each row includes its reporting period and original source.
What the data says
The direction of travel remained positive through August. Business asset finance new business reached £2.965 billion during the month, 10% higher than in August 2025. The three-month total of £10.344 billion was 9% higher than a year earlier, while the rolling 12-month total of £41.934 billion was 6% higher.
Across the first eight months of 2026, FLA members provided £27.5 billion to businesses for investment in machinery, equipment and vehicles. Of that total, £17.2 billion went to SMEs. A single month can still be influenced by transaction timing and larger deals, so the cumulative and rolling annual figures give a better view of the market than one month alone.
Growth by asset type
| Asset category | July 2026 annual change | What it covers |
|---|---|---|
| Plant and machinery | +9% | Productive equipment used across construction, manufacturing and other industries. |
| Commercial vehicles | +7% | Vans, trucks and other vehicles used by businesses. |
| Business equipment | +6% | A broad category of operational equipment outside the main vehicle, plant and IT groups. |
Source: Finance & Leasing Association, July 2026 new business release. These are year-on-year changes for the month, not forecasts for the full year.
How businesses are financing assets
Hire purchase remained the largest product category in the FLA's 2025 market review, accounting for 53.2% of new business. Operating leases and contract hire represented 26%. This reflects two different needs: businesses may want a route towards ownership, or they may prefer access to an asset without owning it during the agreement.
The right structure still depends on cash flow, tax treatment, asset life and the intended end position. Our guides to hire purchase, equipment leasing and business finance products explain the practical differences.
Business investment context
Revised Office for National Statistics figures show UK business investment increased by 1.8% in Q2 2026 compared with the previous quarter. Information and communication technology equipment and other machinery and equipment were among the largest positive contributors to whole-economy investment growth.
Asset finance is only one way to fund that investment, but it connects finance directly to productive equipment. The British Business Bank reported that SME asset finance grew 4% to £24.4 billion in 2025, the fifth consecutive year of growth.
Cost of finance context
Bank of England data shows the effective interest rate on newly drawn SME bank loans was 6.63% in August 2026, up from 6.61% in July. SME bank borrowing grew 4.6% over the year and SMEs borrowed a net £0.9 billion during August.
Important: the Bank of England figure is a bank-loan rate, not an equipment finance price. Asset finance costs vary by asset, term, deposit, agreement type, business profile and lender. It is included here only as wider financing context.
Outlook for the market
The FLA's Q2 2026 industry outlook survey received responses from 83 member firms. Of those respondents, 63% expected new business volumes to increase over the following 12 months. At the same time, 61% expected UK economic conditions to deteriorate, mostly slightly.
That combination points to a market that expects demand and lending activity to grow despite a cautious economic backdrop. It is an industry survey, not a guarantee of future volumes. The Bank of England's Q3 2026 Credit Conditions Survey also reported that demand for corporate lending from small and medium-sized businesses had decreased during the quarter.
What this means for businesses
- Compare the total amount payable, deposit, term and end-of-term position, not only the monthly payment.
- Choose a provider whose asset and sector appetite fits the purchase. See our equipment finance sector guide.
- Prepare the supplier quote, asset details and current financial information before applying.
- Do not try to time a purchase from one monthly market figure. Base the decision on business need and affordable cash flow.
- Check whether hire purchase, leasing or asset refinance best matches the intended outcome.
Methodology and sources
This briefing uses publicly available UK sources and states the period attached to each figure. FLA data covers its member firms and may not represent every provider in the market. ONS data can be revised, while survey results describe respondent expectations rather than confirmed future activity.
- Finance & Leasing Association: August 2026 asset finance and lending figures
- Finance & Leasing Association: July 2026 asset finance sector breakdown
- Finance & Leasing Association: State of the Market Report 2026
- British Business Bank: Small Business Finance Markets Report 2026
- Office for National Statistics: Business investment, Q2 2026 revised results
- Bank of England: Money and Credit, August 2026
- Finance & Leasing Association: Industry Outlook Survey, Q2 2026
- Bank of England: Credit Conditions Survey, Q3 2026
Frequently asked questions
How large is the UK asset finance market in 2026?
Finance & Leasing Association members reported £41.934 billion of business asset finance new business in the 12 months to August 2026. They provided £27.5 billion to businesses for machinery, equipment and vehicles in the first eight months of 2026, including £17.2 billion to SMEs.
Is UK equipment finance growing in 2026?
Finance & Leasing Association business asset finance new business was 10% higher in August 2026 than in August 2025. The three-month total was 9% higher and the rolling 12-month total was 6% higher than their previous-year comparisons.
Which asset finance sectors grew in July 2026?
The latest published sector breakdown on this page is for July 2026. Finance & Leasing Association new business for plant and machinery grew 9% year on year, business equipment grew 6% and commercial vehicle finance grew 7%.
What are the main forms of equipment finance?
Hire purchase and leasing are the main forms of equipment finance. Finance & Leasing Association data shows hire purchase represented 53.2% of asset finance new business in 2025, while operating leases and contract hire represented 26%.