Funding for vehicles, plant, machinery, IT and fit-out, paid for over the period the asset is working rather than out of this month’s cash. Equipment already owned can be refinanced to release the capital sitting in it.
1 to 7 years · hire purchase, finance lease, operating lease or refinance · deposit from 0% to around 20%
Typical situations
A new line, a bigger press, a second van. Paying cash for it empties the account that covers wages and stock, and the asset will earn across the next five years rather than this quarter. Hire purchase spreads the cost over that period and leaves you owning it at the end, which is usually what an owner wants for a machine with a long working life.
Assets bought outright, sitting on the balance sheet doing nothing for cash flow. A refinance releases capital against them and repays over a term, without disturbing any other facility.
Shopfitting, catering equipment, racking and IT, often across several suppliers at once. Soft assets are funded on shorter terms and tighter criteria, so the structure needs settling before the orders are placed.
Lenders divide equipment into hard and soft. A hard asset holds its value, is easy to identify and easy to sell again: an excavator, a CNC machine, a commercial vehicle. A soft asset does not: shopfitting, IT, signage, furniture. Hard assets attract longer terms, smaller deposits and more lenders. Soft assets attract shorter terms and tighter criteria, and sometimes need a different facility altogether.
Hire purchase spreads the cost and title passes to you at the end, which suits anything you intend to keep. A finance lease rents the asset over its working life with the option to continue or sell it on the lender’s behalf, and keeps the capital cost off the balance sheet in some structures. An operating lease covers use for a defined period and hands the asset back, which suits equipment that dates quickly.
Choose the agreement around what happens at the end of the term, not around the monthly figure. The cheapest monthly payment on an asset you intend to keep for a decade is rarely the cheapest way to own it.
Indicative market ranges, not an offer of finance. Terms depend on the lender, the security and your circumstances.
What the lender assesses
What goes in the pack
A funder will not pay out on a machine it cannot trace. Serial numbers, service history and proof that the seller owns it outright go in at the start, especially on a private sale.
An invoice made out to a director personally, or to a dormant company in the group, stops a payout on the day it was meant to happen. The borrowing entity is confirmed before the order is placed.
Shopfitting and IT funded as though they were plant come back declined. Splitting a fit-out across the right funders for each element is slower to arrange and faster to complete.
Deposit, term and end-of-term position move together. We settle all three before the supplier is committed, so the monthly figure you agreed is the one that appears on the documents.
Under hire purchase you are buying the asset in instalments and own it at the end. Under a lease you are paying for its use, and at the end you either hand it back or, on a finance lease, continue on a secondary rental. Which is right depends on whether you want to own the asset at the end and on how you and your accountant want it treated.
Usually, though age matters. Most funders set a limit on how old an asset can be at the end of the agreement, which shortens the term on older equipment. Provenance is the sticking point on private sales: serial numbers, service history and evidence that the seller owns it outright.
Anywhere from nothing to around 20%. A new hard asset from a dealer, on a business with a clean profile, often goes through with no deposit. A used soft asset on a shorter trading record sits at the other end. The asset usually decides it more than the accounts do.
Yes, provided you own it outright and it holds identifiable value. The funder buys the asset and you repay over a term, which releases the capital tied up in it. It is a common way to raise working capital without touching an overdraft or giving a charge over property.
It is secured on the asset rather than on everything else, so it usually leaves other facilities undisturbed, and it does not consume an overdraft. Lenders do look at how many agreements are already running, which is why the schedule of existing agreements goes into the pack.
Where the spend is not an identifiable asset, or covers several things at once.
Where the pressure is on working capital rather than on a single purchase.
The supplier quote, the asset details and two years of accounts are usually enough for us to come back with the term, the deposit and which funders suit the asset.
