Asset Finance UK: Rates, Providers, HP & Leasing
By Joshua Giles, Founder and Director · Reviewed by the CoreFi credit team
Last updated 20 July 2026
CoreFi is a broker, not a lender. We do not set rates and lenders make all credit decisions.
In short: Asset finance spreads the cost of equipment, machinery or vehicles over their working life, usually 1 to 7 years, secured on the asset itself rather than your property. Hire purchase makes you the owner; a lease keeps title with the lender. Most agreements have fixed monthly payments. We place these deals for UK limited companies.
Asset finance is secured on the thing you are buying, so in most cases the lender does not take a charge over your property or a personal guarantee. You pay for the asset over its working life, commonly 1 to 7 years, and the monthly payment is fixed from the day the agreement starts.\n\nThe structure you pick changes the tax treatment, and that is the decision that actually matters. Hire purchase makes you the owner once the final payment lands, so you can claim Annual Investment Allowance on the full cost in year one (up to £1M) instead of depreciating it over several years. A finance lease leaves title with the lender while you get full use of the kit, and you deduct the lease payments as a business expense rather than claiming AIA. An operating lease is the one where you hand the asset back at the end, which is the right call for technology or vehicles where you do not want to carry the residual value risk yourself.\n\nDeals in the £5k to £500k range are the bulk of what we place. Above £500k, and particularly for bespoke or specialist equipment, the lender will want more detail and sometimes an independent valuation, so build that into your timeline. We cannot promise a rate before the lender has seen the application. What we can tell you is that advance rates on mainstream equipment run 80 to 100% of invoice value, and deposits range from nothing (strong covenant, standard asset) to 20% or more (used kit with a thin resale market).
Key Benefits
- Hire purchase lets you claim Annual Investment Allowance on the full asset cost in year one, which can be worth more to your tax bill than the interest costs across the term
- The asset itself is the security. For established businesses that usually means no property charge, no debenture, and no director guarantee
- Payments are fixed for the whole term, so you can model the cost directly against the contract or revenue the asset earns
- Sale-and-leaseback releases capital from kit you already own outright: you sell it to the lender and lease it back, so you free the cash without losing the use of it
Frequently Asked Questions
What is the difference between hire purchase and leasing?
With hire purchase you own the asset once every payment is made plus a small option-to-purchase fee, and the lender treats you as the owner for tax from day one, so AIA applies. A finance lease keeps legal ownership with the lender and you deduct the lease payments as revenue expenditure instead. An operating lease means you hand the asset back at the end, which takes the residual value risk off your balance sheet.
Can I claim capital allowances on asset finance?
On hire purchase, yes. You can claim Annual Investment Allowance on the full purchase price in year one, up to the current £1M AIA limit. On a finance or operating lease you cannot claim AIA, but the lease payments are deductible against profits. Which route wins depends on your tax position in the year you buy, so run it past your accountant rather than a broker.
Is a deposit required?
On new assets from a recognised supplier, some lenders will fund 100% of invoice with nothing down. More often you are looking at around 10% upfront. Used equipment, lower-margin assets, or a thin credit history push that to 20% or more. A larger deposit lowers the monthly payment and can move you into a better rate band with some lenders, though no rate is fixed until the lender has seen the deal.
Can I finance used equipment?
Yes, used assets are financed routinely, including kit bought at auction. The lender assesses remaining useful life and, on higher-value items, may want an independent valuation from an approved surveyor. For very old or bespoke equipment the advance rate will sit below what you would get on new kit from an established manufacturer.
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£54,000
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£64,502
Total interest
£10,502
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How Asset Finance Works
How asset finance works in the UK: spread equipment and vehicle cost over the asset's life, hire purchase vs leasing, deposits, and refinancing.
Hire Purchase vs Leasing for Business Assets
Hire purchase vs leasing for UK business assets: ownership, VAT and tax treatment, balance sheet and upgrade cycles compared, with indicative guidance.
Asset finance by location
Lender appetite varies by city and region. If you would rather start from where your business is based, these local guides cover the same funding with the local picture.
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Get matched with lendersCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.