Asset Finance
What is Asset Finance?
Asset finance helps businesses by providing a flexible way to acquire the equipment, vehicles, or machinery they need without large upfront cost.
What types of assets can I finance?
Examples include: vans, HGVs, trucks, cars, IT equipment, manufacturing machinery
How does Asset Finance work?
Asset finance allows your business to acquire vital equipment, machinery, or vehicles without paying the full cost upfront. Instead, you spread the monthly payments over time through an agreed finance plan.
Types of Asset Finance
Ownership or Return (Depending on the Type)
- With Hire Purchase, you own the asset at the end of the term.
- With Finance Lease, you use the asset and may have the option to extend or upgrade.
- With Operating Lease, you rent the asset and return it at the end of the term.
- With Asset Refinance, you unlock cash from assets you already own.
Find what you need
To improve cash flow or fund growth without selling off or losing access to essential equipment.
Who is Asset Finance for?
Any business (start up or established), regardless of industry, that needs to acquire high-value assets without tying up large amounts of capital.
Types of Asset Finance Offered
Hire Purchase
Fixed monthly repayment terms and you own the asset on completion.
- Key Features:
- Low upfront deposit
- Fixed monthly repayments
- Full ownership at the end of the term
- Ideal for long-term assets like vehicles, machinery, or equipment
Best For:
Businesses that want to own the asset at the end of the agreement but prefer to avoid paying the full cost upfront.
Finance Lease
The finance provider purchases the asset, and your business leases it for an agreed period, paying fixed monthly rentals.
You have full use of the asset throughout the term, and at the end, you can choose to:
- Continue leasing at a reduced rate
- Upgrade to a new asset
- Sell the asset on behalf of the lender (and keep a share of the proceeds, depending on the agreement)
- Key Features:
- No large upfront payment
- Fixed, tax-deductible monthly costs
- Full use of the asset without ownership
- Option to upgrade or extend at the end of the lease
- No VAT upfront to pay. VAT paid on monthly payments
Best For:
Businesses that want long-term use of an asset with flexibility, without the need for ownership.
Operating Lease
The asset remains the property of the finance provider, and you return it at the end of the lease term—making it ideal for short- to medium-term use or rapidly depreciating assets.
- Key Features:
- Lower monthly payments than other leasing options
- No responsibility for the asset’s resale value
- Off-balance sheet funding (in many cases)
- Option to upgrade or change assets regularly
Best For:
Businesses that need access to up-to-date equipment without the intention of owning it—perfect for IT, technology, or fleet management.
Asset Finance
Allows your business to unlock the value tied up in existing assets—such as vehicles, machinery, or equipment—by using them as security for a new loan or finance agreement.
The finance provider gives you a lump sum based on the asset’s value, which you repay over time in fixed instalments. This improves cash flow without selling valuable equipment.
- Key Features:
- Release cash from owned assets
- Improve working capital or fund new investments
- Fixed monthly repayments
- Retain use of the asset while freeing up capital
Best For:
Businesses that own valuable assets and want to raise cash quickly to support growth, manage cash flow, or consolidate debt—without disrupting operations.
Sale and Hire Purchase Back
A flexible way to release cash from assets your business already owns. You sell the asset (such as vehicles or machinery) to a finance provider, then immediately hire it back through a Hire Purchase agreement.
This gives your business an instant cash injection while allowing you to continue using the asset as normal. Once the final payment is made, ownership of the asset returns to you.
- Key Features:
- No large upfront payment
- Continue using the asset with no disruption
- Fixed monthly payments
- Regain full ownership at the end of the term
Best For:
Businesses looking to improve cash flow or fund growth without selling off or losing access to essential equipment.
Asset Finance Comparison Table
| Feature / Finance Type | Hire Purchase | Finance Lease | Operating Lease | Asset Refinance | Sale & HP Back |
|---|---|---|---|---|---|
| Ownership at End | Yes, after payment | No, but you can agree a peppercorn payment at the end of lease | No | Yes (you already own it) | Yes (after Final payment) |
| Monthly Repayments | Fixed instalments | Fixed rentals | Lower rentals (no ownership cost) | Fixed repayments | Fixed repayments |
| Upfront Deposit | Usually required | Usually lower than HP | Often low or none | Not required (cash is released to you) | Not required (asset is sold to lender) |
| Tax Benefits | Capital allowances + interest deductions | Lease payments often tax-deductible | Lease payments often tax-deductible | Interest may be deductible | Similar to Hire Purchase |
| Asset on Balance Sheet | Yes | Yes (but depends on accounting rules) | No, often off-balance sheet | Yes | Yes |
| Best For | Business wanting ownership | Businesses needing use without owning | Short-term or fast-depreciating assets | Raising cash from owned assets | Releasing cash while keeping and using the asset |
Benefits of Asset Finance
Preserves Cash Flow
Instead of paying a lump sum, businesses can spread the cost over time—keeping more cash in the business for day-to-day operations or growth
Enables Access to Essential Equipment
It allows companies to obtain the tools they need to operate efficiently—whether it’s vehicles, IT equipment, or heavy machinery—without waiting to save up capital
Predictable Budgeting
Fixed monthly payments make it easier to plan and manage finances, with no surprise costs
Protects Credit Lines
Because asset finance is typically separate from bank loans, businesses can keep their existing credit facilities free for other needs
Offers Tax Efficiency
Some types of asset finance may be tax-deductible (e.g., lease payments may be claimed as a business expense). All interest can be tax deductible, but not capital repayments
Provides Flexible Options
Different types of finance (eg leasing, hire purchase, refinance) allow businesses to choose the most suitable structure based on ownership preferences and financial situation
Supports Growth and Scalability
With easier access to the right equipment, businesses can scale up faster, take on new contracts and stay competitive
5 Steps for Asset Finance
1
Get in touch
2
Meeting to assess your needs
3
Meet lender
4
In principal offer from lender
5
Accept offer & buy equipment
Speak to us about your requirements
Using Asset Finance to preserve working capital and improve cashflow
Financial Issue
- A precision engineering company which following a tumultuous trading period, the well-established business had seen its net worth eroded and substantial debts built up with HMRC
- The business needed to raise funds to allow existing finance agreements to be settled and facilitate a pre-pack administration
Fast forward 2 years
- The business had been trading well, but day-to-day cash flow levels were being hampered by repayments of a bridging loan that had been taken out as a means to keep the business afloat in 2019
- To enable the business to progress they were looking to raise additional funding to realign the company’s financial position
Past
- The Lender structured a refinance funding package totalling £400,000. This paid off existing finance with six incumbent funders and raised additional capital to allow the pre-pack administration to go through. Consequently the business was saved and multiple jobs were secured.
Fast forward 2 years
- The lender was able to raise the capital required by arranging a ‘re-draw’ on their existing refinance facility which released the funds required to repay the bridging loan in full.
- By extending the term of the refinance agreement this reduced those monthly repayments too. Overall this provided the business with a reduction in their monthly outgoings of over £3,800
- The deal was approved, the bridging loan had been paid and the new refinance funding facility was in place
- With the strain on the business’ day-to-day cash flow levels alleviated and a substantial portion of debt cleared, they are now in a much stronger position and to fulfil the potential progression of the business.