Reviewed 30 September 2026. General information, not advice.
What can asset finance cover?
Asset finance is a broad term for arrangements that help a business access equipment, vehicles or machinery without paying the entire cost upfront. The financed asset usually plays a central role in the agreement.
Examples could include an oven, a delivery van or production equipment. Lenders will assess the asset as well as your ability to pay.
Hire purchase and leasing are different
Hire purchase usually spreads the purchase price over a deposit and instalments, with ownership typically passing after the final payment and any purchase fee.
With leasing, you pay to use the asset. Ownership normally remains with the finance provider, and options at the end depend on the contract. Ask whether maintenance, mileage limits, usage restrictions or return conditions apply.
Look beyond the monthly figure
Compare the deposit, instalments, interest or rental charges, VAT treatment, fees and the final payment. A low monthly price may include a larger payment at the end.
Tax and accounting treatment depend on the agreement and your circumstances. Check with your accountant instead of assuming that every payment will be deductible in the same way.
Match the term to the asset
Think about how long the equipment will remain useful, how much it might cost to maintain and whether the business would still need to pay if it becomes unsuitable.
Read early termination and repossession terms. If the asset is essential to trading, losing access could have an immediate effect on income.
A few common questions
Will I own the equipment?
That depends on the agreement. Hire purchase and leasing have different ownership arrangements. Check the final payment and end-of-term options.
Can asset finance cover used equipment?
Some providers finance used assets, subject to age, condition, value and other criteria. Availability depends on the provider and asset.
British Business Bank: finance options for smaller businesses
Eligibility and product terms change. Confirm the current details with the provider before making a decision.