Asset finance - Fund vehicles, equipment and machinery
Asset finance helps your business spread the cost of vehicles, equipment and machinery over time. Instead of a large upfront purchase, you pay in instalments while using the asset to operate and grow.
Funding Options by Tide works with more than 85 UK lenders and has helped over 17,000 businesses secure more than £1bn in funding. Compare options in minutes and find the right asset finance for your needs.
Asset finance: what it is and how it works
What is asset finance?
Asset finance is a form of business funding used to acquire or refinance physical assets such as vehicles, plant, machinery, IT and other equipment. You either lease or hire purchase the asset, paying over an agreed term with fixed or variable repayments.
Common structures include hire purchase, finance lease, operating lease and asset refinance. The right choice depends on whether you want ownership, balance sheet treatment and the level of flexibility you require.
How does asset finance work?
Choose the asset and agree the purchase price with a supplier.
A lender funds the asset and you enter a lease or hire purchase agreement.
You pay a deposit if required, then regular repayments over the term.
At the end of the term you either own the asset, return it, upgrade it or refinance it depending on product type.
This can preserve cash flow, align payments with the useful life of the asset and help you invest without a large initial outlay.
Types of asset finance
Hire purchase
Spread the cost and gain ownership at the end, often after a nominal option to purchase fee. Suited to assets you plan to keep long term.
Finance lease
You rent the asset for most of its useful life. At the end, you can continue leasing, sell on behalf of the lessor or upgrade. Ownership stays with the lender.
Operating lease
Shorter than a finance lease with lower rentals because the lessor expects residual value. Often includes maintenance and upgrade options
Asset refinance and sale and leaseback
Release equity tied up in assets you already own. The lender refinances the asset and you repay over time.
Vehicle and equipment finance
Specialist facilities for cars, vans, HGVs, yellow plant, manufacturing lines, medical and IT equipment.
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
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Our smart technology will compare quotes from up to 80+ lenders to help you find the ideal business loan.
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We'll be there to guide you through every step of the process.
Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ lenders
Access a wide range of trusted lenders: from high street banks to alternative finance providers.
No fees or obligations
Our service is completely free to use. You’re in control of who you borrow from.
Fast, personalised results
Get real-time matches based on your business profile and funding needs.
Expert support when you need it
Our team is here to help — by phone, chat, or email.
Trusted by over 17,000 customers
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
Is asset finance right for your business?
Asset finance is suitable for:
UK-based limited companies, sole traders, and partnerships
Businesses needing vehicles, equipment, or plant
Companies with regular cash flow or trading history
Those seeking to preserve cash for day-to-day operations
It may not be suitable if you have poor credit or operate in sectors with volatile cash flow and asset depreciation.
Asset finance vs business loan
Feature | Asset finance | Business loan |
Use of funds | Tied to specific asset | Flexible |
Ownership | May or may not own | Not linked to an asset |
Collateral | Asset-secured | May require personal guarantee |
Repayments | Fixed, tied to asset | Fixed |
Suitable for | Vehicles, machinery | Working capital, marketing |
What lenders look for
Lenders typically assess:
Credit history and financial health
Business trading history
Value and type of asset
Purpose of use
Deposit or residual value (if applicable)
Providing up-to-date accounts and accurate equipment details can help speed up approval and secure better rates.
What assets can I finance?
Vehicles: cars, vans, HGVs, specialist commercial vehicles
Plant and machinery: excavators, forklifts, CNC, presses
Technology: servers, laptops, telecoms, POS
Specialist: medical equipment, catering, print, renewables
Costs and rates
Repayments depend on asset type, term, deposit, residual value and your credit profile. Costs usually include:
Interest or rental charge
Arrangement or documentation fee
Option to purchase fee for hire purchase
Maintenance or excess usage charges on some leases
Ask for an itemised quote and compare total amount payable, not just the monthly price.
Pros and cons of asset finance
Pros and cons of asset finance
Pros | Cons |
Preserve cash flow with predictable repayments | Interest and fees increase total cost vs cash |
Unlock access to essential equipment quickly | Early termination or mileage limits can apply |
Potential tax and accounting benefits | You may not own the asset with leases |
Match payments to asset life and usage | Deposit or documentation fees may be required |
Option to upgrade or replace at term end | Asset can be repossessed if payments are missed |
How to apply for asset finance
1. Decide what you need
Confirm the type and cost of the asset
2. Compare your options
Choose between leasing, hire purchase, or refinance
3. Get matched with lenders
Funding Options by Tide can connect you to a wide panel
4. Submit documents
Financials, proof of ID, and equipment quotes
5. Receive a decision
Often within 24–48 hours
6. Access the asset
Once approved, you can order the equipment or release equity
Alternatives to asset finance
For broader working capital
Business loans can provide a lump sum to support day-to-day operations or larger growth plans.
Flexible access to funds as needed
Revolving credit facility lets you draw down as needed, only paying interest on what you use.
For assets needed short-term
Equipment leasing helps you get the assets you need without the upfront cost of ownership.
Release funds tied up in unpaid invoices
Invoice finance allows you to release working capital without waiting for clients to pay.
Based on card revenue
Merchant cash advance gives you a flexible repayment model tied to your revenue.
Specifically tailored for vans, lorries, and fleet vehicles
Commercial vehicle finance is tailored for vans, HGVs, or fleet upgrades.
Learn more about asset finance
What is the difference between hire purchase and finance lease?
Hire purchase leads to ownership at the end after a small option to purchase fee. A finance lease is a long term rental where you do not own the asset and usually continue leasing, upgrade or sell on behalf of the lessor. More info on this article about hire purchase vs finance lease.
How much deposit do I need for asset finance?
Many lenders accept deposits from 0 to 20 percent depending on credit profile, asset type and term. A higher deposit can lower monthly repayments.
Can I claim tax relief on asset finance?
Tax treatment depends on the product and your circumstances. Businesses may be able to claim capital allowances on hire purchase or deduct lease rentals as an expense. Seek independent tax advice.
How quickly can I get asset finance approved?
Simple proposals can be approved rapidly once documents are provided. Complex or high value assets may take longer due to underwriting and valuations.
Can I finance used equipment?
Yes, many lenders fund used assets if condition, age and resale value meet criteria. Rates and terms may differ from new equipment.
What happens at the end of the term?
Hire purchase - you usually pay a small fee and take ownership. Finance lease - continue leasing, upgrade or arrange a sale and share proceeds per your agreement. Operating lease - return or upgrade the asset.
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.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.