Table of Contents
What is it?
Asset finance is a way to fund the purchase (or use) of business equipment, vehicles, or machinery without paying the full cost upfront. You either lease the asset, or buy it gradually over time using something like hire purchase. The asset itself acts as security for the lender.
This makes it a popular choice for businesses that need expensive kit but want to keep cash in the bank.
Pros and Cons
| Pros | Cons |
|---|---|
| ✅ Spread the cost over time – no big upfront hit | ⚠️ You might not own the asset until the end (depending on the deal) |
| ✅ Keeps working capital free for day-to-day use | ⚠️ Could cost more overall compared to buying outright |
| ✅ Fixed monthly payments make budgeting easier | ⚠️ May require a deposit or upfront payment |
| ✅ Often quick to arrange and secured against the asset itself | ⚠️ Missed payments may lead to the asset being taken back |
| ✅ Potential tax benefits (VAT reclaim, capital allowances, expense deductions) | ⚠️ Only works for specific physical assets (not general business costs) |
When is it a good fit?
Asset finance makes sense if:
- You need to invest in equipment, vehicles, or machinery
- You want to avoid a big lump sum spend
- You’d rather not use personal or property assets as security
- You’re looking for possible tax relief options
Extra tips and things to consider
- Hire Purchase: You’ll usually own the asset at the end (after a final payment), and may be able to claim capital allowances.
- Leasing: More like renting – ideal if you regularly upgrade or replace equipment.
- Many agreements allow you to reclaim VAT on the asset or offset monthly payments as business expenses – speak to your accountant to check what applies to your setup.
You can also refinance existing assets you already own to release cash – a handy option if you need a lump sum.
Still unsure?
We’ll help you work out whether leasing, hire purchase, or refinancing your gear makes the most sense for your business.
Try our [Finance Finder Tool] or give us a call – we’re happy to chat it through.
