Asset finance calculator

How the monthly cost is worked out

The calculator amortises the amount financed (the asset price less any deposit) over the term at the rate you enter, then, if you add a balloon, holds that final lump sum back so it is not paid down over the term. Mechanically: the present value of the balloon is subtracted from the financed amount, the remainder is spread into equal monthly payments using a standard annuity, and the balloon is settled at the end from a refinance, a sale or a part-exchange. That is why a bigger balloon lowers the monthly payment but raises the total interest: you are borrowing more, for longer. On a hire purchase agreement the VAT is usually paid up front and is not financed; on a finance lease the VAT is spread across the rentals. The figure here is indicative and for planning; the lender sets the actual rate once they have assessed the asset and your business.

Hire purchase or finance lease: which is cheaper for you

The two structures look similar on the monthly cost but differ in ownership, tax and balance-sheet treatment, and one is usually clearly better for a given situation.

Hire purchase means you are buying the asset on instalments and own it outright at the end. You can usually claim capital allowances on the cost, and the asset sits on your balance sheet. It suits assets you want to keep and that hold value, such as commercial vehicles, plant and machinery.

A finance lease means you rent the asset over its useful life; the rentals are typically an allowable business expense, and at the end you continue at a nominal rent, sell the asset on the lender's behalf for a rebate, or upgrade. It suits kit that dates quickly or that you would rather not own, such as IT, or where preserving cash and spreading the VAT matters more than ownership.

As a broker we see the same deal priced differently across the two structures depending on the lender's appetite for the asset, so it is worth modelling both. Flip the Type selector above to compare them on your own numbers.

What actually drives your rate

Asset finance is priced against the security more than the borrower, which is why it is often more accessible than an unsecured loan of the same size. The biggest levers on your rate are:

The asset itself. Hard, liquid, resaleable assets such as vehicles and standard machinery attract the widest lender appetite and the keenest rates, because the lender can recover value if things go wrong. Specialist or soft assets such as bespoke plant, IT or fit-out need a lender comfortable with that category and usually price higher.

New versus used, and age. New assets and low-mileage vehicles tend to price better than older, higher-hours kit, because residual values are more predictable.

Deposit and balloon. A larger deposit reduces the lender's exposure and can sharpen the rate; a large balloon does the opposite on total cost, even as it lowers the monthly payment.

Your covenant. Trading history, profitability and the sector all feed in. A profitable, established company borrowing against a mainstream asset is a very different proposition from an early-stage business or an unusual asset. The table below gives indicative ranges by asset type; they are illustrative only, and the offer you receive is the lender's alone.

How much you can borrow, and what lenders look for

Asset finance in the UK typically runs from around a thousand pounds up to several million, over terms of one to seven years, matched to the expected life of the asset. Because we place these deals rather than lend ourselves, we match the case to lenders whose appetite fits the asset type, the ticket size and your trading profile, rather than sending one application to a single desk.

To move quickly, have ready a supplier quote or invoice for the asset, your most recent accounts and a few months of bank statements, and, for vehicles, the registration and mileage. Lenders are assessing two things: whether the asset is good security, and whether the business can service the payments. A clear picture on both moves a case forward faster. Any figure discussed before a formal offer is indicative; approval, rate and term are the lender's decision and depend on your business.

How we help you get a sharper rate

A few things genuinely move the price on an asset finance deal, and our job as your broker is to line them all up in your favour before a single lender sees the case.

We take it to the right lender first. The asset finance market is fragmented, with manufacturer-backed schemes, independent funders, bank-owned lessors and specialist books, each with a different appetite by asset type and sector. Approaching them one by one is slow and leaves credit footprints. We hold that criteria detail across our panel, so we can focus your case on the lenders most likely to price it keenly, and package it so it is assessed properly the first time.

We structure the deal to price well. We will model a deposit or a balloon against your cash flow, match the term to the asset's life rather than the longest available, and present the asset and its resale market in the terms a lender underwrites. Small structuring choices can move the rate more than shopping around does.

We tell you straight what is realistic. We cannot promise a rate or an approval, because those sit with the lender, but we can give you an honest read on where your deal is likely to land and save you the hours a scattergun search would cost. It costs nothing to have us model it, and there is no obligation. Send us the asset and your numbers and we will come back with indicative terms from lenders whose criteria fit.