Equipment Finance: Fund Business Assets Without Draining Cash

What is Equipment Finance?

Equipment finance lets you acquire business assets. machinery, vehicles, technology, or any tangible equipment. without paying the full cost upfront. You spread the cost over the useful life of the asset, preserving cash flow for the rest of your business.

It's one of the most accessible forms of business finance because the asset itself acts as security. This means approval rates are high and rates are typically lower than unsecured lending.

Types of Equipment Finance

Hire Purchase (HP)

You make fixed monthly payments over an agreed term (typically 2-7 years). Once all payments are made, you own the asset outright. During the agreement, the finance company legally owns it.

• Best for: Assets you want to keep long-term. machinery, commercial vehicles, manufacturing equipment
• Deposit: Typically 10-20% (some lenders offer 0%)
• Tax benefit: Capital allowances on the asset, interest is an allowable expense
• Typical term: 2-7 years

Finance Lease

You rent the equipment for a fixed period. At the end, you can extend the lease at a nominal rental, or the asset is sold and you receive a share of the proceeds. You never technically own it.

• Best for: Equipment that depreciates quickly or that you'll want to upgrade. IT hardware, company cars
• Deposit: Often none required
• Tax benefit: Lease payments are fully deductible as a business expense
• Typical term: 2-5 years

Operating Lease

Short-term rental of equipment. The lessor takes the residual value risk. You use it, return it, and walk away. Common for vehicles and technology where you want the latest models.

• Best for: Short-term projects, company car fleets, equipment you'll upgrade regularly
• Key benefit: Lowest monthly cost because you're not paying for the full asset value
• Off balance sheet: Doesn't show as debt on your accounts

Sale and Leaseback

Already own equipment? Sell it to a finance company and lease it back. You unlock the capital tied up in the asset while continuing to use it as normal. Useful for freeing up cash without disrupting operations.

What Can Be Financed?

Almost any tangible business asset, including:

• Commercial vehicles (vans, trucks, fleet cars)
• Manufacturing machinery and CNC equipment
• Construction plant (excavators, cranes, scaffolding)
• IT hardware (servers, laptops, networking equipment)
• Catering and hospitality equipment
• Medical and dental equipment
• Agricultural machinery
• Printing and packaging equipment
• Gym and fitness equipment
• Salon and beauty equipment

New and used: Most lenders finance both new and second-hand equipment, though used assets may require a higher deposit.

How Much Does It Cost?

Rates depend on the asset type, your business profile, and the deposit amount. New equipment from established manufacturers typically attracts the best rates.

Try our calculator to estimate monthly payments.

Equipment Finance vs Paying Cash

Even if you can afford to buy outright, financing often makes more sense:

• Preserve cash. keep working capital for day-to-day operations
• Tax efficiency. spread the tax relief over the asset's life
• Inflation works for you. fixed payments become cheaper in real terms over time
• Upgrade more often. leasing lets you switch to newer equipment regularly
• Hedge against obsolescence. technology depreciates fast; don't tie up capital in it

How to Qualify

• 6+ months trading (some lenders accept startups for certain assets)
• UK limited company, LLP, or sole trader
• Clear purpose. the asset must be for genuine business use
• Reasonable credit history. doesn't need to be perfect

How to Apply

1. Check eligibility. quick eligibility check, no credit impact
2. Tell us what you need. asset type, new or used, rough cost
3. Get matched. we connect you with a suitable equipment finance provider
4. Approve and acquire. sign the agreement, receive or order the equipment