Asset finance
Finance an asset (equipment, vehicle, machinery) where the asset itself is the security. Cleaner credit position than unsecured term loans because the lender can recover the asset if things go wrong. Personal guarantee requirements are softer. Best for established limited companies buying equipment or vehicles, and for newer companies where the asset can do the reassuring that filed accounts otherwise would.
Founder & Managing Director, Muswell Rose, FundBiz
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind FundBiz. His background runs through commercial finance, mortgages and fintech, including as managing director of an invoice finance business. He oversees FundBiz's guides and lender reviews.
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At a glance
- Ticket size
- £5,000 to £5m+
- Typical rate
- From 6.5% APR
- Term
- 2 to 7 years (asset-life dependent)
- Security
- The asset itself
- Decision
- 2 to 5 business days
- Personal guarantee
- Often softer than unsecured
- Lender soft search
- Often at quote stage
Four structures
- Hire purchase (HP). You pay the asset off in instalments and own it at the end. The asset is on your balance sheet from day one.
- Finance lease. Long-term lease covering most of the asset's useful life. You account for it as an asset and a liability; you may have a purchase option at the end.
- Operating lease. Shorter lease, asset stays off balance sheet, you return it at the end. Common for vehicles and IT.
- Asset refinance. You already own the asset; the lender pays you cash secured against it, and you repay over time. Useful for releasing capital trapped in equipment.
Who it fits
- Manufacturing buying machinery.
- Construction acquiring plant.
- Hospitality investing in fit-out and kitchen equipment.
- Recruitment, professional services and tech buying IT or vehicles.
- Established Ltd companies wanting to release cash from owned equipment.
UK lenders in this market
Allica Bank (asset finance and HP), Aldermore, Time Finance, BNP Paribas Leasing Solutions, Compass Business Finance, plus several specialists for soft assets (IT, software) where mainstream lenders are cautious. Weighing asset finance against other routes? Compare business finance products side by side.
Asset finance by asset type
Specific guides covering rate, term, lender shortlist and watch-outs by asset class.
Plant
Hospitality
Healthcare
Agriculture
When another route fits better
If the purchase is property rather than plant, a commercial mortgage is the right home. Where there's no discrete asset to secure against, an unsecured business loan keeps it simple, and for a time-critical purchase ahead of longer-term funding, bridging finance can cover the gap.
Run the numbers first
Asset finance comes in four structures and an outright purchase. The cost difference shows up over the full term, not just in the headline monthly. Compare side by side, then sense-check affordability before applying.
- Asset finance cost compare Hire purchase, finance lease, operating lease and outright buy on the same asset. Total cost over the term.
- Balloon and residual value working model Excel model: the monthly saving and extra interest from a balloon, and whether the asset will be worth more than you owe.
- Affordability ratio DSCR-style check that the asset's monthly cost is comfortably covered by your operating cashflow.
Send an enquiry
FundBiz is not a lender. If you send an enquiry, we pass your details to a business finance broker, who will contact you about your options.
Check your asset finance options →