Spread the cost of equipment, vehicles, machinery and technology. Compare asset finance from a panel of UK lenders. Free, no obligation.
Last updated: September 2026
Asset finance lets a business acquire equipment, vehicles, machinery or technology without paying the full purchase price upfront. The lender pays the supplier, and your business repays the cost over an agreed term, usually with the asset itself acting as security.
The same product family can also release cash from assets you already own, through asset refinance. In either direction, the cost is spread across the working life of the asset rather than absorbed in one large outlay.
Depending on the lender and the asset, you may see it called equipment finance, equipment leasing, machinery finance, plant finance, vehicle finance or simply lease finance. These describe the same funding route applied to different asset types. The specific agreements within it are hire purchase, finance lease, operating lease and asset refinance, each covered below.
For example, a manufacturer buying a £80,000 CNC machine on a 5-year hire purchase agreement might pay a 10% deposit (£8,000) and repay the remaining £72,000 plus interest in monthly instalments. The machine is used in production immediately. Ownership transfers to the business at the end of the term.
Compare quotes for the same asset, deposit and term. A smaller monthly payment can leave a larger payment at the end, or mean that you return the equipment rather than own it.
Five steps from identifying the asset to using it in your business.
Agree the specification and price with your supplier, or identify the asset you already own that you want to refinance.
We submit your business details and asset information to suitable lenders on the panel. The asset itself, plus your business profile, drives the decision.
Lenders typically respond within a few working days. Offers cover the facility size, term, monthly payment, deposit (if any) and end-of-term options.
Once you accept, the lender issues a finance agreement. After signature, the lender pays your supplier directly (or pays you, for asset refinance).
You use the asset from day one. Repayments are typically monthly across a term aligned to the asset's useful life, commonly 2 to 7 years.
A few details up front let us match you to lenders faster and shape the right facility.
We do not run a credit search at the enquiry stage. A formal search happens only once you accept a lender's offer.
Different structures suit different end goals. The choice mostly depends on whether you want to own the asset, and how you want it to appear on your balance sheet.
The three main asset finance structures, side by side. The right choice depends on whether you want ownership and how you want the asset treated for accounting and tax.
| Feature | Hire purchase | Finance lease | Operating lease |
|---|---|---|---|
| Who owns the asset during term | Lender | Lender | Lender |
| Who owns the asset at end of term | You (after final payment) | Usually lender, sometimes optional purchase | Lender (asset returns) |
| Asset on your balance sheet | Yes, from day one | Yes | Usually no (operating cost) |
| Maintenance responsibility | You | You | Typically lender |
| Can upgrade during term | No | No | Often yes |
| Deposit typically required | Yes (5% to 20%) | Sometimes | Often nil |
| Best for | Long-life assets you want to own | Full use without ownership | Short-term use or regular upgrades |
Tax and accounting treatment varies between structures. This is general guidance only, not tax or accounting advice. Always confirm the right structure for your circumstances with a qualified accountant or tax adviser before signing.
Asset finance can offer tax and balance sheet advantages depending on how it is structured. Each variant is treated differently for VAT, capital allowances and accounting.
With most lease arrangements, VAT is charged on each rental payment, which can ease cash flow. With hire purchase, VAT is typically charged on the full asset price at the start. VAT-registered businesses can usually reclaim this in the normal way, subject to HMRC rules.
Hire purchase usually lets you claim capital allowances on the full asset value, as though you owned it from day one. Finance leases may allow capital allowances depending on the lease structure. Operating leases generally do not, because you are renting rather than acquiring the asset.
Operating lease rentals are typically fully deductible as a business expense. With hire purchase and finance lease, the interest element is deductible and the asset is depreciated through your accounts. Different structures suit different tax positions.
This is general guidance, not tax or accounting advice. The tax and VAT treatment of asset finance depends on your specific circumstances and can change over time. Always speak to a qualified accountant or tax adviser before choosing a structure or signing an asset finance agreement.
Asset finance suits any business acquiring productive equipment, vehicles or machinery that holds its value.
Vehicles, plant, machinery, IT or specialist equipment that the business uses to generate revenue. Asset finance is not designed for pure consumption purchases.
Spreading the cost over the working life of the asset frees up working capital for other parts of the business.
Most lenders will set a term aligned to the asset's useful life, commonly 2 to 7 years. Assets with longer lives can sometimes be financed over longer terms.
Most facilities require a deposit (5% to 20% is common) and predictable monthly payments. Lenders assess affordability based on trading history and projections.
FundingLinks arranges asset finance for UK limited companies, LLPs and PLCs. Terms and pricing vary by lender, and some require a minimum trading history.
Asset finance preserves cash and can be tax-efficient, but you are committed for the full term.
Asset finance pricing varies widely depending on the asset, term, deposit and your business profile. The main cost components are:
Interest rate
6% to 15% p.a.
Depending on whether the asset is new or used, hard or soft, the term length, and your business profile. Prime borrowers with strong assets and large deposits can secure lower rates.
Deposit
5% to 20%
Of the asset value, sometimes nil for established businesses or in certain lease structures.
Documentation fee: A one-off charge to set up the facility, typically £150 to £500.
End-of-term costs: Hire purchase usually has a small option-to-purchase fee at the end. Operating leases may have excess use or damage charges if applicable.
Pricing on softer or specialist assets (IT, software, medical equipment) is often higher than on hard assets like vehicles or machinery, because resale value is lower.
VAT treatment depends on the structure of your facility and your VAT status. This is general information, not tax advice. Always confirm the VAT treatment with your accountant before signing.
We help you compare the market without sending your details to unsuitable lenders.
Share your business details, the asset you want to fund, and your preferred structure (own, lease, refinance).
We compare offers from 100+ UK lenders, including specialist asset finance providers, challenger banks and high-street lenders.
Review the options, structure and end-of-term choices. Pick the agreement that fits your accounting and cash flow needs.
Once documentation is signed, the lender pays your supplier directly. You start using the asset, and repayments begin per the agreed schedule.
Specialist support for UK SMEs looking to compare asset finance and equipment funding options.
100+ UK lenders, including high-street banks, challenger banks, specialist lenders and alternative finance providers. We are an independent broker, not tied to any single lender.
Founded by Sam Wells and Chris Findlow, with 35+ years' combined experience in commercial finance. You speak to specialists, not a call centre.
Track your enquiry, review lender offers and exchange documents in one secure portal. No email chains, no spreadsheets, full visibility from enquiry to drawdown.
No upfront charge to use FundingLinks. Fees apply only if you proceed with a facility, and they are agreed in writing before you commit.
Direct answers to the questions business owners usually ask about asset finance.
Asset finance is a way for a business to acquire equipment, vehicles, machinery, technology or other productive assets without paying the full cost upfront. The lender pays the supplier, the asset acts as security, and your business repays the cost over an agreed term. The same product family can also release cash from assets you already own, through asset refinance.
With hire purchase, you own the asset once the final payment is made. With a finance lease, the lender retains ownership at the end of the term and you typically have the option to continue renting, return the asset, or sell it on the lender's behalf. Hire purchase suits businesses that want long-term ownership. Finance lease suits businesses that want the use of an asset without taking it onto their books permanently.
A finance lease usually covers the full cost of the asset plus interest, runs for most of the asset's useful life, and the asset stays on your balance sheet. An operating lease is typically shorter, the asset returns to the lender at the end, the lender often handles maintenance, and the rental can usually be treated as an operating cost rather than a balance sheet item.
Most physical assets used productively in a business. Hard assets include vehicles, plant, manufacturing machinery, agricultural equipment, construction equipment, and commercial vehicles. Soft assets include IT hardware, software, telephone systems, security and CCTV, office equipment, medical and scientific equipment, and hospitality equipment. Lenders generally apply a "DIMS" test: assets should be Durable, Identifiable, Moveable and Saleable.
A hard asset holds its resale value and is easy for a lender to identify, move and sell, such as a vehicle, excavator or CNC machine. A soft asset has little second-hand value or cannot easily be recovered, such as software, CCTV, shop fit-outs or telephone systems. The distinction drives pricing and terms: hard assets attract lower rates, smaller deposits and longer terms, because the asset itself is worth something if the agreement fails. Soft assets are usually priced higher and often need a personal guarantee alongside.
An option-to-purchase fee is a small one-off charge at the end of a hire purchase agreement that transfers legal ownership of the asset from the lender to your business. It is often a nominal amount, sometimes equivalent to one monthly instalment. Until it is paid, you have been hiring the asset with an option to buy it, which is why hire purchase is named as it is. Finance leases and operating leases do not have one, because ownership never transfers.
FundingLinks arranges asset finance for UK limited companies, LLPs and PLCs. We do not broker finance for sole traders. Terms and pricing vary by lender, and a director may be asked to provide a personal guarantee.
Most asset finance is sized to the value of the asset being purchased or refinanced. Facilities range from a few thousand pounds for soft assets up to several million for plant, machinery or fleets. Pricing depends on the asset value, your business profile, the term, and the deposit.
Often, but not always. Hire purchase typically requires a deposit of 5% to 20%. Finance leases sometimes require a deposit. Operating leases often do not. A larger deposit usually means lower monthly payments and may improve your interest rate.
It depends on the structure. With hire purchase, you make a final option-to-purchase payment and own the asset. With a finance lease, you can usually continue renting, return the asset, or sell it on the lender's behalf. With an operating lease, the asset returns to the lender. With asset refinance, you have repaid the lender and you own the asset outright again.
Most asset finance agreements allow early settlement, but lenders typically apply a settlement charge. The exact figure depends on the agreement and how much of the term has run. Always check the early settlement terms before signing.
Treatment varies by structure. Operating lease rentals are usually fully deductible as a business expense. Hire purchase and finance lease let you claim capital allowances on the asset and deduct the interest element. This is general guidance only, not tax advice. The right structure for your business depends on your specific tax position. Always speak to a qualified accountant or tax adviser before choosing.
Asset refinance releases cash from an asset you already own. The lender buys the asset from you at an agreed value, you lease it back, and you continue using it as normal. It is often used to free up working capital tied up in vehicles, plant or machinery without losing access to the asset.
For asset finance, in many cases yes, particularly for newer businesses or higher-value facilities. Because the asset itself acts as security, reliance on a guarantee is often lower than with unsecured lending. The guarantee makes you personally liable for the debt if the business cannot meet repayments. Established businesses with strong trading history may be able to negotiate the guarantee away, or limit its size.
Other funding options that can work alongside, or instead of, asset finance.
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Written by
Director, FundingLinks
Sam Wells co-founded FundingLinks alongside Chris Findlow, after more than 10 years in invoice finance and alternative lending, including senior broker and partnership roles at Kriya. He helps SMEs access competitive funding by matching them with the right lender, product and structure for their stage of growth.
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