The Government should use the Budget to unlock more private finance for productive investment, while helping households reduce the cost of essential energy and motoring, the Finance & Leasing Association (FLA) has said.
FLA members already finance 34.3% of UK investment in machinery, equipment and vehicles, putting the sector at the heart of the Government’s ambition to increase investment, productivity and growth across the country.
In its submission ahead of the Budget, the FLA is calling for a new Productive Finance Partnership, led by the British Business Bank, to bring more institutional and private capital into specialist SME finance, with asset finance at its core.
The Partnership would help connect long-term pools of capital with the specialist lenders financing machinery, vehicles and technology for SMEs across the UK, turning more private capital into productive investment in local economies.
The FLA is also proposing an industry-funded “Ready for Finance” service to help SMEs understand their financing needs, improve their readiness for finance and access appropriate funding.
Alongside measures to increase business investment, the FLA is calling for action to help households and businesses reduce costs, including greater use of private finance through the Warm Homes Plan and a coherent approach to electric vehicle taxation that protects the affordability of the transition to electric motoring.
Shanika Amarasekara MBE, Chief Executive of the Finance & Leasing Association, said:
“The Government has made increasing investment and productivity central to its growth agenda. The Budget is an opportunity to turn that ambition into investment in businesses and communities across the country.
“FLA members already finance more than a third of UK investment in machinery, equipment and vehicles. They provide the finance that allows businesses to invest in the assets and technology they need to modernise, increase capacity and become more productive.
“With public finances constrained, the question is how we get more private capital flowing into that productive investment. Our proposed Productive Finance Partnership would bring together the British Business Bank, institutional investors and specialist lenders to help make that happen.
“We also need to make it easier for SMEs to access the finance that is already available. Ready for Finance would be an industry-funded way of helping businesses understand what finance they need, whether they are ready for it and what they need to do next.
“The same principle applies to household finances. Private finance can help people invest in measures that permanently reduce their energy bills and access lower-cost motoring, but Government policy needs to support rather than frustrate those choices.
“The Budget should therefore focus on a simple objective: creating the conditions for finance to flow into the businesses, assets and technologies that will raise living standards and productivity.
“If we can mobilise more private capital, widen access to finance and give lenders the certainty to invest, the finance industry can help turn the Government’s growth ambitions into economic activity in every part of the country.”
FLA members provided £163 billion of new finance to UK households and businesses in 2025, including £40.3 billion of asset finance, of which £24.4 billion supported SMEs. FLA members also financed 34.3% of UK investment in machinery, equipment and vehicles.
Its Budget submission calls for:
- Mobilising private capital for productive SME investment
- Increasing business investment in productive assets
- Improving SME access to finance
- Reducing household energy and business costs through private finance
- Supporting an affordable transition to electric vehicles
- Protecting the capacity to lend and invest
The FLA says that increasing investment does not depend simply on the availability of capital, but on ensuring that capital can reach businesses and households and be turned into productive assets, lower costs and economic growth.
