How does asset finance work?

Answer in brief

Asset finance spreads the cost of equipment or vehicles over fixed monthly payments, with the asset itself securing the deal. You choose the asset, the provider pays the supplier, and you repay over a fixed term, usually one to five years for vehicles and up to around seven for some machinery. Because the asset is security, approval can be easier than for an unsecured loan.

Step by step

Pick the asset and get a quote from the supplier.
Choose a structure, such as hire purchase or a lease.
Apply with your business details and the quote.
The provider approves you, and you sign the agreement.
The provider pays the supplier and you take delivery.
You make monthly payments for the agreed term.

Deposits and balloons

Many agreements ask for a deposit. A balloon payment is a larger final payment that lowers the monthly cost but adds to what you pay at the end.

What's needed to apply

The asset quote or invoice
Business details and turnover
Recent bank statements
Latest accounts for larger deals

Questions and answers

How quickly can asset finance be approved?

Straightforward deals can be approved within a day or two. Larger or specialist assets take longer.

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