Asset finance
Spread the cost of equipment across the years it earns, rather than paying for it all in the month you buy it. The kit itself does most of the work of securing the deal.
Request a callback- Typical amount
- £5,000 to £5m+
- Typical term
- 1 to 7 years
- Security
- Usually the asset itself
- Ownership
- Depends on the structure
Figures are indicative market ranges at the time of writing, not offers or quotes. What is available to your business depends on the lender, your circumstances and the security available.
About asset finance
Asset finance is an umbrella term for any facility where the funding is tied to a particular piece of equipment. Because the funder holds an interest in something it could sell if things went wrong, it is generally cheaper and easier to obtain than an unsecured loan of the same size.
That single idea splits into several structures. Hire purchase ends with you owning the asset. A lease does not. Refinance runs the whole thing backwards, raising cash against equipment you already own. Which one suits you depends on how long you will keep the asset, what it will be worth at the end, and how you would rather it sat in your accounts.
The market for it is deep and highly specialised. Funders build their pricing around resale values in particular sectors, which is why a lender that understands excavators will beat a generalist on an excavator every time — and will not want to know about a commercial kitchen.
Where it works well
The pattern to look for is an asset that earns steadily and holds some value.
- Equipment that will still be worth something in three or four years, which keeps the funder's risk low and your rate down.
- Purchases large enough that paying cash would leave the business uncomfortably tight.
- Replacing ageing kit before it fails, rather than after it has already cost you a contract.
- Growth that depends on capacity — a second machine, a second van, a second production line.
- Businesses with limited property or other security to offer, since the asset supplies it instead.
Things worth checking first
- Whether the agreement ends with you owning the asset, and what it costs if it does not.
- The balloon or final payment, if there is one, and whether you have a plan for meeting it.
- Who is responsible for insurance, maintenance and repair during the term.
- What happens if you want to settle early, or replace the asset before the term ends.
- How the agreement is treated for tax and in your accounts — worth a word with your accountant.
Frequently asked
Can I fund used equipment?
Usually, yes. Funders will look at the age of the asset and how much working life is left in it, and they will often want the term to end well before the equipment does. Genuinely old kit narrows the field but rarely closes it.
Do I need to have traded for long?
Less than you would for an unsecured loan. Because the funder is secured against the asset, asset finance is often the most realistic route for a younger business — though expect a personal guarantee and a slightly higher rate early on.
Can I fund something I have already bought?
Often, if the purchase was recent. This is called a sale and hire purchase back, and there is usually a window — commonly a few months from the invoice date — within which a funder will consider it. Beyond that it becomes a refinance.
You might also want
Tell us what the money is for
A short conversation is usually enough for us to tell you what is realistic — including when the answer is that you should not borrow.
