The UK asset finance sector concluded 2024 on a high note, demonstrating significant expansion. According to the latest data from the Finance & Leasing Association (FLA), December 2024 saw a notable 7% increase in new business compared to the same month in the previous year. This growth contributed to an overall annual rise of 3%, reaching a record £39.7 billion. The industry's robust performance underscores its crucial role in supporting various sectors of the economy.

Commercial vehicle finance and plant and machinery finance sectors were particularly strong, with respective increases of 14% and 4% in December 2024 over the same period in 2023. However, the new car finance sector experienced a slight decline of 4%. Despite these variations, the asset finance market maintained its momentum, driving investment in essential areas such as vehicles, machinery, and equipment. The commercial vehicle finance sector led the charge with a remarkable 10% growth throughout the year, while other segments faced more modest gains or challenges.

The asset finance market played a pivotal role in fostering economic development by financing one-third of UK investments in vehicles, machinery, and equipment in 2024. It provided substantial support to businesses of all sizes, with new lending to small and medium-sized enterprises (SMEs) increasing by 1% to £23.5 billion, and lending to larger businesses growing by 6% to £14.5 billion. This financial backing is vital for helping businesses transition to sustainable practices and achieve net-zero goals. As the industry continues to evolve, it calls for government support through initiatives like the green finance guarantee to ensure sustainable funding and inclusion in full expensing regimes.

The asset finance sector's impressive performance highlights its indispensable role in bolstering the UK economy. By facilitating investment and supporting businesses' transition to greener operations, the sector contributes significantly to national sustainability efforts. Continued collaboration between the industry and policymakers will be crucial in maintaining this positive trajectory and fostering a resilient and environmentally conscious future.