Asset Finance

If you need to replace old equipment or invest in some new software, and you don’t have immediate access to sufficient free capital, then Asset Finance solutions can be a great alternative route.

Under a Business Asset Finance agreement, you take out a loan to buy or lease the asset you need without having to delay. The miscellaneous assets which can be secured through an Asset Finance deal can be anything beneficial to your business, from a new computer to a fleet of delivery vans.

Many UK Asset Finance arrangements are hire purchase contracts, which give you immediate access to an asset that you will ultimately own outright. The payments can be spread over several years, making it very efficient in terms of managing capital outlay.

If you'd like an informal chat about whether this type of finance solution is right for you, get in touch.

Alternatively, you can also sign a leasing agreement, which gives you the use of the asset without you ever actually getting to own it. Instead, at the end of the agreed term, you simply hand back the asset or possibly enter into a new agreement for a more modern equivalent.

Asset Financing agreements are therefore a flexible alternative to a bank loan. They allow you to invest in the thing you need today, to compete effectively, and keep control over your ongoing cash flow: and because they are a form of secured lending, either a lease agreement or hire purchase can be cheaper to arrange than a standard bank loan.


Eligibility For Asset Finance UK

While many Asset Finance Brokers in the UK may vary slightly on what makes you eligible to apply for asset financing, you typically need to prove the following:

  • You have a good credit history
  • Your company information such as name, nature of business, address and registration numbers
  • You are a UK resident for at least three years (Northern Ireland is an exception)
  • Provide three sets of accounts filed at Companies House
  • Answers to questions such as your asset particulars, your expectations and your financial health

Hire Purchase for companies

These agreements generally require that you pay an up-front deposit, followed by fixed monthly instalments for a term generally up to five years. After you make your final payment, the ownership of the asset will transfer to you.


A lease agreement may be cheaper, as you won’t ever own the asset. It involves getting permission to use the asset for a period of time in return for a monthly fee – usually, the fee, including any interest, is agreed at the outset and fixed for the entire term, so you have complete clarity before you sign.

Often manufacturers offer leasing agreements, and these can also include regular servicing options. You get to use the required asset throughout the agreed period, without needing to tie up any capital.

Leasing also means that if you can’t pay at a future date, you only lose the use of that particular asset. In the interim, so long as you keep up-to-date with the agreed payments, the lender can’t cancel the agreement and withdraw the asset from you.

Asset Refinancing UK for businesses

If you currently own an asset, then you might be able to borrow against some or all of its capital value. (For example, if it’s a vehicle, you can borrow up to its resale value today, not its cost when it was bought new.) 

Or you can sell the asset to a lender, who then agrees to lease it back to you immediately. That way you get some immediate capital for use against other priorities, without losing the use of the existing asset entirely. This will impact your Balance Sheet, as the asset is no longer yours.

When to consider Asset Finance arrangements

To access more efficient, modern equipment at a lower capital cost to the business.

Are there disadvantages?

Leasing or hire purchase can be more expensive overall, compared to buying the asset outright for a one-off cash lump sum. You will also find it hard to cancel a long-term agreement if your circumstances or requirements change in future.

With our long-standing reputation as a reputable Asset Finance broker, The Lending Channel can introduce you to lenders offering competitive rates for Asset Financing deals of all kinds.

Call a member of our team today on 01738 583008 for a free no-obligation discussion of your requirements and to discuss if Asset Loans or short-term Asset Finance is the best solution for you.

We are a credit broker, not a lender and are paid a commission by our lenders, full details of this along with our fees will be detailed in the Terms of Business we issue to you.

The Lending Channel ltd is a member of the National Association of Commercial Finance Brokers (NACFB).

2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel ltd are authorised and regulated by the Financial Conduct Authority.
FCA number 626787
Company number SC334818
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