What is asset finance?
Asset finance is a way for businesses to access essential equipment, vehicles, or technology without paying the full cost upfront.
Instead, the cost of the asset is spread over an agreed period. You get what your business needs today, while keeping cash available for salaries, suppliers, and day-to-day operations.
In short: you invest when the opportunity is there, not months later.
How asset finance works
Asset finance is typically secured against the asset itself. Payments are made in fixed instalments, making costs predictable and easier to plan for.
Depending on the type of finance you choose, you may:
Own the asset at the end of the agreement
Use the asset for a fixed period without ownership
Unlock cash from assets you already own
Core types of asset finance
Hire Purchase
Hire Purchase (HP) is suited to limited companies that want to own the asset outright.
You usually pay an initial deposit, followed by fixed monthly payments. Once the final payment is made, the asset becomes yours.
This option works well for machinery, vehicles, or equipment you expect to use long term.
Finance Lease
A Finance Lease gives your business access to the equipment it needs without committing to ownership.
You pay a fixed monthly amount to use the asset over an agreed period. Maintenance and insurance are typically your responsibility.
At the end of the term, you may be able to extend the lease, return the asset, or sell it and share in the proceeds.
This option suits businesses that want flexibility or plan to upgrade equipment regularly.
Asset Refinance
Asset Refinance allows businesses to release cash tied up in assets they already own.
High-value machinery, vehicles, or equipment can be refinanced to provide a lump sum of capital, which is then repaid through fixed monthly payments.
It’s often used to improve cash flow, fund growth, or support short-term working capital needs.
Why limited companies use asset finance
Asset finance isn’t just about spreading costs. It’s about control and timing.
Key benefits include:
Preserved cash flow: Avoid large upfront payments and keep working capital available
Predictable costs: Fixed repayments support budgeting and forecasting
Faster growth: Access equipment and technology when your business needs it
Operational efficiency: Invest in tools that improve productivity and performance
Is your business eligible?
Asset finance is available to most UK-based organisations, including:
Limited companies and PLCs
LLPs
Registered charities, clubs, and local authorities
Eligibility will depend on factors such as business status, asset type, and affordability.
Moving forward
For limited companies, growth often comes down to timing. Asset finance could give you a way to invest in equipment, machinery, or vehicles when the opportunity arises – without putting unnecessary strain on cash flow.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
Photo by Diego PH, Unsplash
