Asset finance
Asset finance, explained without the jargon
Seven ways to fund the kit your business runs on. Here is what each one actually does, side by side, so you can see which fits before anyone quotes you a rate.
Start here
The choice is simpler than it looks
Every asset finance product is answering the same two questions: who owns the thing at the end, and when do you pay the VAT. Once you have decided those, the shortlist is usually down to two.
The table below sets all seven out on the same five points, in the same order, so you can read across rather than opening seven brochures. Each row links through to the full detail, and if you would rather just describe the asset and let us tell you, that takes about ten minutes on the phone.
Compare
All seven, on the same five points
The same rows appear on every product page, so nothing gets compared against a different measure.
| Product | Typical term | Initial outlay | VAT treatment | End of agreement | Balance sheet |
|---|---|---|---|---|---|
| Hire purchase | 12 to 60 months (up to 84 on some assets) | Deposit from around 10%, plus the VAT | Paid in full at the start; reclaimable on your next return | You own the asset after the final payment and option-to-purchase fee | On it from day one — the capital allowances are yours |
| Finance lease | 24 to 60 months primary period | Usually one to three monthly rentals in advance | Charged on each rental, spread across the term | Secondary rental, sell as the funder’s agent and keep most of the proceeds, or hand back | On it, with rentals split between capital and interest |
| Operating lease | 24 to 60 months against agreed mileage or hours | Usually one to three rentals in advance | Charged on each rental | Hand the asset back, subject to fair wear and tear and agreed mileage | Off it for FRS 102 small entities; on it under IFRS 16 |
| Fleet finance | 24 to 60 months, staged by delivery date | Depends on the product each vehicle sits on | Follows the product used for each vehicle | Mixed — own, hand back or renew, vehicle by vehicle | Depends on the mix of products across the fleet |
| Asset refinance | 12 to 60 months | None — you receive a lump sum instead | On the rentals or the finance charge, depending on the structure | Title reverts to you once the agreement is settled | The asset stays with you; a liability is added alongside it |
| Sale & leaseback | 24 to 60 months | None — you are paid for the asset up front | You may need to raise a VAT invoice on the sale; VAT then applies to the rentals | Buy back, extend or hand over, depending on how the agreement is written | The asset comes off; cash and a lease liability go on |
| Business loans | 3 months to 6 years | None | Not applicable to the loan; interest is not VATable | The facility closes when the final payment clears | A liability, with no asset attached to it |
Scroll the table sideways on a phone · Typical market terms, not a quotation
In detail
Read up on any of them
Hire purchase
Fixed payments on an asset you intend to keep. Yours outright at the end.
See how it worksFinance lease
Full use of the asset with the VAT spread across the rentals rather than paid up front.
See how it worksOperating lease
Lower rentals because the funder carries the residual value. Hand it back at the end.
See how it worksFleet finance
Two vehicles or two hundred, under one facility and one renewal calendar.
See how it worksAsset refinance
Release working capital from kit you already own, and carry on using it.
See how it worksSale & leaseback
Sell an asset you own outright to a funder and lease it straight back.
See how it worksBusiness loans
Funding for the costs that have no asset attached — tax bills, fit-outs, wages.
See how it worksDescribe it and we will say
Tell us the asset and how long you will keep it. That usually settles it in ten minutes.
Get in touchWhat we fund
The assets behind the agreements
Vans and light commercials
Panel vans, crew cabs, pickups, tippers and dropsides — the vehicles most small businesses actually run.
HGVs, trailers and tippers
Tractor units, rigids, curtainsiders, tippers, flatbeds and trailers, new or used, from the main manufacturers.
Construction and plant
Excavators, telehandlers, dumpers, rollers, loaders and site accommodation, from a mini-digger up.
Agricultural machinery
Tractors, balers, harvesters, sprayers and handling equipment, on terms that work around a farming year.
Manufacturing and machine tools
CNC machines, presses, packaging lines, woodworking and engineering kit — new installations or additions.
Specialist and soft assets
Catering equipment, gym kit, IT and AV, refrigeration, medical and dental. If it earns, it is usually fundable.
Common questions
Before you choose
No, and most people do not. Tell us what you are buying, how long you expect to keep it and what your cashflow looks like, and we will tell you which of the seven fits and why. The comparison table is there for people who like to arrive knowing — not because it is expected of you.
Used is fine and very common, particularly on plant, HGVs and agricultural machinery. Age and hours affect the term a funder will offer and sometimes the rate, but a well-maintained used asset from a reputable dealer is straightforward. Private sales are harder but not impossible — tell us the situation and we will tell you honestly whether it will fly.
It narrows the panel rather than closing the door. Some funders will look at businesses under two years old, particularly where the directors have relevant trading history, and a larger deposit or a personal guarantee will often bridge the gap. What we will not do is fire your application at every lender in the market and damage your credit profile in the process.
Next step
Not sure which one fits?
Describe the asset and how long you will keep it. That is normally enough for us to point you at the right two.