New research from Time Finance reveals a major gap between awareness and adoption of Asset Finance among UK SMEs, highlighting untapped opportunities for businesses to invest in growth.
A recent Finance Apathy Survey conducted by Time Finance, in collaboration with Censuswide, found that while 79% of SMEs are familiar with Asset Finance, only 24% are actually using it to fund equipment purchases. This suggests that many businesses recognise the solution but are not leveraging its benefits. More concerning is that 21% of businesses are unaware of Asset Finance altogether, limiting their financial flexibility and potential expansion.
Despite this underutilisation, data from the Finance and Leasing Association (FLA) indicates that total asset finance new business reached a record high of £39.7 billion in 2024, growing by 3%. A closer look at this growth, however, reveals a mixed picture: while car finance and plant and machinery finance grew by 14% and 4% respectively, commercial vehicle finance experienced a 4% decline.
Steve Nichols, Managing Director of Asset Finance at Time Finance, emphasised the urgency of bridging the gap between awareness and application. He pointed out that while many businesses know about Asset Finance, they are not fully capitalising on its advantages, particularly when it comes to acquiring new equipment. With the UK government relying on increased business taxation to raise £40 billion in extra revenue, many businesses are operating with limited cash reserves. This makes alternative funding solutions like Asset Finance even more crucial for maintaining financial stability and unlocking growth potential.
Nichols also noted that while the FLA figures reflect an overall positive trajectory for Asset Finance, the details indicate slowing momentum in plant and machinery purchases and a downturn in commercial vehicle financing. With one-third of UK investments in machinery, equipment, and vehicles facilitated through Asset Finance in 2024, the appetite exists, but greater efforts are needed to educate SMEs on the value of using this financial tool for expansion.
As a specialised funding solution, Asset Finance enables businesses to acquire essential equipment without significant upfront costs, making growth more accessible. For SMEs eager to expand but constrained by cash flow, this financing method offers a practical and manageable way to invest in their future. By closing the awareness-to-adoption gap, more businesses can take advantage of Asset Finance to drive sustainable growth and innovation.
Time Finance plc (LON:TIME) is an AIM-listed business specialising in the provision or arrangement of funding solutions to UK businesses seeking to access the finance they need to realise their growth plans. Time Finance can fund businesses or arrange funding with their trusted partners through Asset Finance, Invoice Finance, Business Loans, Vehicle Finance or Asset Based Lending.
