What types of Asset Finance are available?
The most common options are:
Hire Purchase (HP)
A structured agreement where you pay a deposit and monthly instalments. Normally all of the VAT is payable in advance, and you claim it back as per normal. Ownership transfers to you at the end for a nominal sum.
Finance Lease
A long‑term rental arrangement where you use the asset for most of its life, but ownership remains with the funder during the fixed period of the lease term.
Operating Lease
A shorter‑term rental, often used for assets that require regular upgrading (e.g., IT, vehicles).
What is the difference between Hire Purchase and Lease Finance?
- Deposit usually required
- Fixed monthly payments
- Asset appears on your balance sheet
- You own the asset at the end
- Capital allowances may be available
- Often no deposit
- Fixed rentals over the term
- Ownership stays with the funder during the period of the fixed term.
- Rentals are typically tax‑deductible
- Options at end: return, extend, or introduce a buyer
HP = Buy over time.
Lease = Rent long‑term with flexibility.
Which option is better for cash flow?
A Finance Lease usually offers the lowest upfront cost, often with no deposit.
Hire Purchase requires a deposit but provides ownership certainty.
Can I own the asset at the end?
- Hire Purchase: Yes — ownership transfers after the final payment.
- Finance Lease: No — but you may continue leasing or in some instances , title can be transferred for a monthly rental.
What assets can be financed?
Almost any business‑critical equipment, including:
- Catering and refrigeration equipment
- Manufacturing machinery
- IT, EPOS, and technology
- Medical and scientific equipment
If it’s essential to your business, it can usually be financed.
Do I need to provide security?
In most cases, the asset itself acts as security. However, additional guarantees may be required depending on credit profile.

How long can I finance an asset for?
Typical terms range from 12 to 60 months, depending on the asset type and expected useful life. For larger assets, this can extend to 84 to 120 months.
Can I settle early?
Yes.
- HP: Early settlement figures are straightforward.
- Lease: Early termination is possible but may involve recalculations based on remaining rentals and residual values.
What are the tax benefits?
- HP: You may claim capital allowances.
- Lease: Rentals are usually fully deductible as operating expenses.
(Always seek independent tax advice.)
Why do businesses use Asset Finance?
- Protects working capital
- Predictable monthly budgeting
- Access to better equipment
- Avoids large upfront payments
- Helps manage technology refresh cycles
Is Asset Finance suitable for SMEs?
Absolutely. Asset finance is widely used by SMEs to support growth, manage cash flow, and acquire essential equipment without strain on capital.


