Data from Valiant Finance indicates a significant surge in asset finance volumes, with a 41% increase in the third quarter and a 33% rise in the fourth quarter of 2025. This growth is attributed to favourable conditions such as reduced interest rates and the extension of the Instant Asset Write-Off scheme, which have encouraged SMEs to invest in essential equipment and technology.
Alex Molloy, Co-Founder of Valiant Finance, observed that in a reduced rate environment, SMEs are prioritising investments that directly support revenue and efficiency. Equipment, vehicles, and technology are no longer considered optional but are critical to staying competitive, prompting businesses to finance these assets when the financial conditions are favourable.
Despite the positive momentum in asset finance, overall business credit demand has shown signs of plateauing. Equifax's Business Market Pulse for February 2026 reported a modest 0.9% year-on-year increase in business credit applications, indicating a shift from the strong growth observed in the latter half of the previous year to a more subdued environment.
As SMEs continue to navigate the complexities of the current economic landscape, the emphasis on asset finance reflects a proactive approach to building resilience and driving long-term growth. By investing in productivity-enhancing assets, businesses are positioning themselves to adapt to changing market conditions and seize emerging opportunities.
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