Asset finance companies in the UK and the equipment they fund

Asset finance companies pay for a business asset and let you spread the cost, using the asset as their security. The Finance & Leasing Association, the industry’s trade body, describes asset finance as leasing and hire purchase for businesses. Most providers also offer refinance, which raises cash against equipment you already own.

• Hire purchase. You pay instalments and own the asset at the end, usually after a small option-to-purchase fee. Our guide to hire purchase covers the detail.
• Finance lease. The finance company keeps legal title and you rent the asset, often with a secondary rental period or a share of sale proceeds at the end. See finance lease vs operating lease.
• Refinance. You borrow against assets you own, or sell them to the lender and pay to keep using them.
• Chattel mortgage. A loan secured by a charge over movable equipment, where you keep ownership.

Our page on asset finance explains how the product works and when it suits a business; this page is about who provides it.

Start with the asset, then narrow the field using what each provider publishes:

• Asset type. Some lenders fund hard assets only. Ultimate Finance, for example, says it does not fund soft assets such as IT, telecoms or EPOS. Others, such as Armada, say they consider soft and intangible assets.
• Deal size. Minimums range from £1,000 to £25,000, and maximums from £250,000 to no stated limit.
• Term. Most publish one to five years; some go to seven.
• Who can apply. Several lenders set a trading history; Novuna asks for at least three years.
• How you apply. United Trust Bank, InterBay and Armada accept new deals only through brokers.
• Regulation. Several state that their agreements are not regulated. Consumer credit rules can apply to sole traders and small partnerships borrowing £25,000 or less, so ask whether yours would be.

Five providers in the Capzy lender directory are banks or part of banking groups. The table lists them alphabetically with each one’s published asset finance terms.

• Allica Bank funds hard, medium and soft assets for established businesses, typically with two years of accounts, and says its asset finance is provided by Allica Financial Services Limited and is not regulated.
• InterBay Asset Finance is OSB Group’s asset finance division. It lends through brokers from £25,000 with no stated maximum, and offers VAT deferral of up to four months on hire purchase.
• Lloyds Bank publishes hire purchase from £15,000 after a minimum 10% deposit, finance leases of up to 100% of the price and vehicle contract hire.
• Renaissance Asset Finance has been a subsidiary of Arbuthnot Latham since April 2017 and writes business from £10k to £4m+, via brokers and direct.
• United Trust Bank funds vehicles and machinery, from prestige cars to CNC machinery, and takes new applications only through approved brokers.

The other twelve are independent finance houses or owned by non-bank groups. Again they are listed alphabetically.

• Admiral Leasing & Loans says it lends its own funds to new and established businesses and assesses proposals on merit rather than on a credit score.
• ALG Finance lends its own funds and also arranges deals with other finance companies, from £1,000 to £3 million, and considers pre-packs, phoenixes and businesses in a CVA.
• Armada Asset Finance funds equipment and soft assets from £2,000 to £250,000, only through its broker network.
• Davenham Asset Finance advances £15,000 to £350,000 on assets such as construction plant, printing and haulage vehicles, for non-regulated businesses.
• Dawsongroup Finance is the finance arm of Dawsongroup plc and focuses on wheeled assets in logistics, transport, food and pharmaceuticals.
• Haydock Finance works through brokers, introducers and vendors on business-critical assets with a resale value, with hire purchase over 12 to 84 months.
• Kingsley Asset Finance finances hard assets from £10,000 to £500,000 and asks for three years’ trading for refinance.
• Liberty Finance lends £10K to £1M to SMEs and high-net-worth individuals and is employee-owned.
• Novuna Business Finance offers hire purchase and leasing to businesses trading for at least three years and says it does not currently offer business loans.
• PEAC Solutions takes broker deals from £1,000 over 24 to 72 months, with IT, medical and vending equipment among its preferred assets.
• Simply Asset Finance states a typical loan size of £5,000 to £10m plus and considers new-start companies.
• Ultimate Finance funds hard assets up to £750,000 per asset and £3m per customer, with set-up and option-to-purchase fees.

The published terms point to a few consistent differences, though every lender sets its own rules:

• Entry criteria. The bank-owned lenders here lean towards established businesses: Allica typically wants two years of accounts and InterBay starts at £25,000. Several independents say they consider start-ups, new companies or businesses after a restructure.
• Asset appetite. Independents more often specialise, in wheeled assets, soft assets or used plant, and Admiral and Armada say they assess proposals on merit or by human underwriting rather than by credit score.
• Route to market. Many specialists and some bank divisions deal only through brokers or suppliers; a high-street bank will usually also deal with you directly.
• Wider relationship. A bank can combine asset finance with your current account, loans and overdraft. An independent offers only the finance.

Most providers ask for a quote or invoice for the asset, recent bank statements and accounts, and details of the directors. Armada, for example, asks established businesses for a proposal form, bank statements and latest accounts, and start-ups for a business plan where available. A personal guarantee may be requested, depending on the lender and the deal.

Cost sits in the instalments, plus any documentation, set-up or option-to-purchase fees. Few of these lenders publish a rate, because pricing depends on the asset, the term and your business. Ask for the total amount payable and every fee in writing.

Tax treatment differs by product. GOV.UK says the Annual Investment Allowance is £1 million and that under a hire purchase contract you can claim capital allowances on the payments from when you start using the item, but not on the interest. It also says you cannot claim plant and machinery allowances on things you lease unless you have a hire purchase contract or a long funding lease. Check your position with an accountant; Capzy does not give tax advice.

Asset finance suits an asset with a working life longer than the agreement. Other routes may fit better when:

• The cost is small or the asset has little resale value: an unsecured business loan does not tie the debt to the item.
• You already own valuable kit: a refinance or sale and leaseback releases cash from it.
• You need help choosing a lender: our guide to asset finance brokers explains how brokers work and are paid.

Capzy is a credit broker, not a lender, and is paid by the lender. You can check your options with a soft search that does not affect your credit score. A lender’s full application may use a hard search.