Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

SMEs Drive Asset Finance Growth Amid Economic Uncertainty

New data from the Finance & Leasing Association (FLA) shows that asset finance new business in the UK grew by 14% in April and was 6% higher in the first four months of the year compared to the same period last year. Lending to small and medium-sized enterprises (SMEs) increased by 8% year-on-year, highlighting the ongoing demand for flexible funding solutions despite economic uncertainty.

The figures indicate that UK businesses, particularly SMEs, continue to seek alternative finance options to support investment. The report notes that this trend is especially significant given the current backdrop of geopolitical instability, inflationary concerns, and rising operating costs.

For letting agents and inventory clerks, the continued willingness of SMEs to invest in machinery, equipment, and facilities may signal ongoing activity in the commercial property sector. The data suggests that many SMEs are prioritising funding solutions that help them maintain working capital while investing in productivity and operational improvements.

The FLA's findings also show that funding for plant and machinery recorded particularly strong growth during the period. This reflects a broader trend of SMEs focusing on efficiency and long-term growth, even in challenging trading conditions.

However, the report highlights ongoing challenges for SMEs and commercial finance brokers when seeking support from larger, mainstream funders. Approval processes and risk appetite at traditional lenders remain restrictive, especially for businesses with complex trading histories or those in higher-risk sectors. As a result, specialist and agile lenders are playing an increasingly important role by offering more flexible and holistic approaches to funding applications.

For property professionals, these trends underline the importance of understanding the evolving finance landscape for SME clients. Access to asset finance remains a critical tool for businesses aiming to spread costs, manage cash flow, and invest in their operations without straining liquidity.