Compare asset finance

Spread the cost of new equipment or borrow against existing assets with asset financing.

How to get asset finance Compare asset finance loans
Learn more about asset finance How asset finance works

If you’re looking to purchase equipment or another asset for your business, asset finance can help make it more affordable. Use the table below to compare competitive asset finance loans based on loan type, amount and term.

Name Product Asset finance options Asset finance amounts Asset finance terms
Bibby Financial Services Asset Finance
Leasing
Hire Purchase
Refinancing
£25,000 to £1,500,000
2 - 5 years
Bibby can offer you lower initial payments as well as payment holidays to help you business during quieter periods when your equipment is not earning.
Arkle Finance Asset Finance
Fixed Term Rental
Finance Lease
Hire Purchase
Marine Mortgage
Loan & Chattel Mortgage
£5,000 to £500,000
1-7 years
Arkle Finance allows you to adjust your repayments in line with your seasonal income.
Funding Circle Asset Finance
Hire Purchase
Hire
£10,000 to £250,000
6 months to 5 years
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Compare up to 4 providers

What is asset finance?

Asset financing is a form of business loan that is used to cover the cost of a business asset, and which is secured against the asset itself.

Most commonly, it allows your small or medium-sized business to obtain the most up-to-date equipment you need (vehicles, office equipment or tech), with little-to-no upfront payment. Instead, you’ll make smaller regular payments over a sustained period of time. Overall, you’ll pay more than it costs to buy the item outright. Still, it’s a useful option for businesses without the immediate funds to make large one-off purchases.

There are a number of advantages to using asset financing over traditional bank loans, although it’s certainly not the best choice for every business. Here’s a detailed guide to this type of financing, with useful pointers on how to find the best deal available to you.

Business loans jargon explained

  • Fixed rate. A fixed interest rate does not change for either a set period of time, or for the entire loan term, which means the size of your interest repayments will remain the same.
  • Secured loan. This is a type of business loan that requires you to use an asset as security against the cost of the loan. In the case of asset finance, this will be the specific asset itself.
  • Variable rate. A variable interest rate can change over time in line with wider market rates, which means the cost of your interest payments can go up and down over the life of the loan.

What types of asset finance are there?

The following are the three main types of asset finance:

  • Finance lease

    The lender retains ownership of the asset throughout the course of the agreement. Essentially, you’re renting the equipment instead of buying it. These deals may be more suitable for highly expensive machinery, vehicles or property. If you only need assets for a short time period, this could be the way to go.

  • Hire purchase

    The lender retains ownership of the asset until the final payment is made. Here, your regular payments cover the cost of purchasing the item, plus interest. These deals are more suitable for basic office equipment or technology. If you’d ultimately like to own the assets you’re paying for, this is the option to choose.

  • Refinancing

    Where you already own assets outright, this option lets you unlock their value to spend elsewhere. You’ll make regular payments to effectively buy back the assets.

Pros and cons of asset finance

Pros

  • You could get access to the latest equipment without a massive initial outlay. This allows you to serve staff and customers to your maximum ability, and you don’t have to break the bank to do it.
  • Upgrade your equipment regularly. If you wish, you can upgrade to the latest equipment every time your current deal expires. In fact, with many hire purchase agreements, you can end the deal whenever you like, although you’ll lose the option to buy the equipment outright by doing so.
  • Make savings elsewhere in your business. In many cases, using new equipment can reduce maintenance and running costs and increase efficiency.
  • It’s easier to be approved for these type of financing agreements. As your loan is secured against the assets borrowed, it’s often possible to be approved without a great business credit score.
  • Most agreements come with fixed interest rates. Fixed payments make it easy to manage your budget over a long time period.

Cons

  • It’s more expensive than buying an asset outright.
  • Your assets will be repossessed if you fall behind on repayments.
  • It’s not always possible to cancel a long-term agreement.
  • Often, you’ll have to pay a deposit.
  • You can’t deduct the value of the equipment from your profits for tax purposes, nor claim capital allowances if the lease period is less than seven years.

Asset finance cost comparison

Loan amount: £50,000
  • Loan term: 1 year
  • Interest rate: 22%
  • Monthly repayment: £4,633
  • Total interest: £5,595
Loan amount: £50,000
  • Loan term: 1 year
  • Interest rate: 36%
  • Monthly repayment: £4,903
  • Total interest: £8,831

How to compare asset finance loans

Here are the main factors to bear in mind when comparing asset finance deals:

  • What do you want to borrow? Some lenders will only offer asset finance for specific items. Some specialise in finance deals on laptops and other tech products. Others only offer commercial fleet finance deals.
  • Finance lease or hire purchase? If you’re ultimately after permanent ownership of your asset, choose a lender that offers hire purchase deals.
  • Weekly or monthly payments? Some lenders offer the choice between weekly and monthly payments. Consider which option fits best with your cash flow, but also the overall cost of each.
  • Flexibility. Some lenders give you the flexibility to cancel your contract early. Others keep you tied in, no matter how your situation changes. Contract flexibility is useful in situations where you need to quickly reduce your outgoings or upgrade to newer assets.
  • The length of the deal. Broadly speaking, the longer your hire purchase deal, the lower your repayments will be, although you’ll pay more in interest overall. Ideally, you’ll want to pay off your debt as fast as you can afford to do so.
  • The cost of the loan. Some lenders will only advertise the cost of the weekly/monthly repayments, including the Representative APR. However, it’s best to compare the overall cost of the deal, as individual lenders might price their assets differently.

How to apply for asset finance

Usually, you can apply for asset financing deals via the lender’s website. The process only takes a few minutes, provided you have the necessary details to hand.

You’ll need to provide some basic information to identify your business, including your company type, business address and limited company number.

It may also be necessary to submit financial details, including VAT returns and bank statements. The lender will then complete a credit check on your business. Your business credit score is based on your previous borrowing history and helps the lender to evaluate whether you’re a risky prospect to lend money to. Your eligibility for the best deals will be based on this score.

You’ll typically be given an instant decision on your application. However, with some lenders, this may take up to three business days.

The bottom line

If your business needs quick access to the best equipment, but you don’t have the capital to buy it outright, asset finance can be a useful tool. For companies with highly irregular cash flows or bad credit, it can offer access to finance when traditional bank loans may not be an option.

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