An asset finance calculator shows what equipment or vehicles would cost on hire purchase. For example, a £60,000 machine with a £6,000 deposit over 4 years at 8% works out at about £1,318 a month and £9,264 of interest. Real offers depend on the lender, the asset and your business, and are subject to status.
Work out asset finance payments
An illustration, not a quote. Lenders set their own rates, fees and terms, and any offer is subject to status and lender criteria.
Check your funding optionsHow does the asset finance calculator work?
The calculator models hire purchase: you pay a deposit, the lender pays for the asset, and you repay the rest in equal monthly payments with interest. You own the asset once the last payment, and any balloon, is made. It shows the amount financed, the monthly payment, the total interest and the total you would pay including the deposit.
Leases work differently: you pay to use the asset and may never own it, and payments can be set by the lender's view of the asset's value at the end. For leasing, the calculator is a rough guide only. Our guide to asset finance explains hire purchase, finance leases and operating leases.
What does a balloon payment do?
A balloon is a larger final payment that is left until the end, so the monthly payments only need to repay the rest. It lowers each payment, but you pay interest on the balloon for the whole term, so the total cost rises.
| Structure | Monthly payment | Balloon at the end | Total interest |
|---|---|---|---|
| No balloon | £1,318 | None | £9,264 |
| £12,000 balloon | £1,105 | £12,000 | £11,040 |
Make sure the business can pay the balloon when it falls due, from cash, by selling the asset or by refinancing it. A balloon set above what the asset will be worth leaves you owing more than it is worth.
How do the term and the deposit change the payment?
A longer term lowers the payment and raises the interest. Lenders usually match the term to the asset's working life, so a long term on an asset that wears out quickly is hard to get.
| Term | Monthly payment | Total interest |
|---|---|---|
| 24 months | £2,442 | £4,608 |
| 36 months | £1,692 | £6,912 |
| 48 months | £1,318 | £9,264 |
| 60 months | £1,095 | £11,700 |
A deposit reduces the amount financed. Some lenders ask for one; Lloyds Bank, for example, publishes a minimum 10% deposit on its business hire purchase, while Allica Bank publishes advances of up to 100%. The 8% rate in these examples is a round figure to show the sums, not what a lender will offer you.
How do you compare asset finance quotes?
Quotes are laid out in different ways, so put them on the same footing before you choose. For each one, note the deposit, the number and size of the payments, any balloon, the fees (documentation, arrangement and option-to-purchase fees on hire purchase) and the total you would pay. The total payable in pounds, including every fee, is the fairest single comparison.
- Flat rate versus interest rate: some quotes give a flat rate, worked out on the original amount for the whole term. Because the balance falls as you pay, the equivalent interest rate is roughly double a flat rate, so a 4% flat rate is not cheaper than a 7% interest rate.
- Payments in advance: some agreements take one or more payments at the start. That raises the cash you need on day one and the true cost of the finance.
- End of the agreement: check what happens at the end, whether you own the asset outright, need to pay an option fee, or must return or sell it.
What about VAT and tax?
- VAT: on hire purchase, VAT on the asset is usually payable up front with the deposit, and a VAT-registered business may be able to reclaim it. On a lease, VAT is usually added to each rental. Check the treatment with your accountant.
- Capital allowances: with hire purchase, the business can usually claim capital allowances on the asset as if it had bought it. Rules depend on the asset and the business, so check with your accountant.
The calculator does not include VAT or any tax relief. Capzy does not give tax advice.
How do you get real figures for your asset?
Capzy is a credit broker, not a lender, and is paid by the lender. You can check your funding options with a soft search that does not affect your credit score; any offer is subject to status and lender criteria. For a loan that is not tied to an asset, try the business loan calculator.
Sources
- Leasing and hire purchase, British Business Bank
- Asset finance: business customer information, Finance & Leasing Association
- Claim capital allowances: what you can claim on, GOV.UK
Capzy is a credit broker, not a lender. We get paid by the lender. This page is general information, not financial, tax or legal advice. Finance is subject to status, lender criteria and affordability; rates and terms depend on your circumstances.