Asset finance UK: hire purchase and leasing for equipment and vehicles

How asset finance works

Asset finance spreads the cost of equipment over the period it earns its keep. With hire purchase you pay a deposit and monthly instalments, then own the asset at the end. With a finance lease you rent the asset for most of its life and usually share in its sale value; with an operating lease you return it, and someone else takes the risk on its value.

Because the asset itself secures the agreement, asset finance is often easier to arrange than an unsecured loan of the same size, and it leaves other borrowing capacity free.

What asset finance costs

The cost depends on the rate, the term, the deposit and any balloon payment: a lump sum at the end that lowers monthly payments but must be paid or refinanced. Add documentation and end-of-term fees, and check who insures and maintains the asset.

The asset finance calculator shows monthly payments, the total payable and the cost of finance with and without a balloon.

Who can use asset finance

Providers look at the business and the asset. Common published conditions:

The asset type, its age and whether it holds its value.
Time trading and turnover, as with other lending.
A supplier quote or invoice for the asset.
Business type: many providers also serve sole traders and partnerships.

Verified providers

We’re verifying the first providers for this route

Products appear here only once we have checked them against the provider’s own published information. Meanwhile, the calculator shows what this kind of finance could cost.

Asset finance calculator

Questions, answered

What is the difference between hire purchase and leasing?

With hire purchase you own the asset once the final payment is made. With leasing you pay to use it; at the end you may return it, extend the lease or share in its sale value, depending on the lease type.

What is a balloon payment?

A larger final payment that lowers your monthly instalments. It must be paid, refinanced or settled by selling the asset at the end of the agreement, so plan for it from the start.

Can I finance used equipment?

Often, yes. Many providers finance used assets, though they may limit the age of the asset at the end of the agreement and ask for an independent valuation.

Is VAT included in asset finance payments?

It depends on the agreement. On hire purchase, VAT on the asset is usually paid up front; on leases it is usually added to each rental. Our calculator excludes VAT, so check the provider’s quote.