Starting a business isn’t just about a great idea. It’s also about having the stuff to make it work — vans, laptops, machines, furniture, whatever your trade calls for. But buying all that gear outright? Not always doable, especially when you’re just starting out.
That’s where asset finance comes in.
Let’s break it down.
What Is Asset Finance?
Asset finance is a way to get the equipment or vehicles you need without paying for them all upfront. Instead, you spread the cost over time — usually monthly — like a rental or a loan. It helps keep your cash in the bank while you get your business rolling.
Think of it as buying time while you build.
You get to use the tools of the trade now, pay for them over months or years, and by the time you’ve cleared the bill, those assets might’ve already paid for themselves.
Why It’s a Game-Changer for New Businesses
Starting a business is already full of risk. You’ve got to pay for branding, websites, licenses, maybe even staff — and your bank account is bleeding fast.
So why drop ten grand on a delivery van or printing machine right out of the gate?
Asset finance gives you room to breathe. You keep your capital for other stuff while still having access to the essentials.
Let’s say you run a small café. You need espresso machines, ovens, fridges. That gear can easily run into the tens of thousands. With asset finance, you can get everything set up without torching your savings. And when customers start coming through the door, their money helps cover your repayments.
Smart, right?
Types of Asset Finance
Alright, let’s look at the flavors of asset finance you might come across.
1. Hire Purchase (HP)
You pay a deposit, then monthly payments. Once you’ve paid in full, you own the asset.
Simple.
Pros:
- You own the asset in the end.
- Fixed payments, so you can budget.
Cons:
- You’re on the hook for maintenance.
- Ties you to that one asset — not easy to swap out if your needs change.
2. Finance Lease
You rent the asset for an agreed period. The lender owns it, but you get to use it like it’s yours.
At the end, you might extend the lease, upgrade, or hand it back.
Pros:
- Lower upfront costs.
- Flexibility at the end.
Cons:
- You don’t own it.
- You might end up paying more in the long run.
3. Operating Lease
This is short-term leasing — you rent the asset, and the provider takes care of servicing, maintenance, etc.
Kind of like renting a car.
Pros:
- Great for tech or things that get outdated fast.
- Low hassle — they handle upkeep.
Cons:
- Higher monthly costs.
- You’ll never own the asset.
4. Asset Refinance
Already own something valuable? You can borrow against it.
Let’s say you own a van. An asset finance provider gives you a loan secured by that van. You get a cash boost, and they get the asset as collateral.
Pros:
- Instant cash from stuff you already own.
- Useful in tight spots.
Cons:
- Risky if you can’t repay — they can repossess the asset.
What Can You Finance?
If it helps you run your business, odds are you can finance it.
- Vehicles: Vans, trucks, taxis, forklifts
- Tech: Computers, servers, point-of-sale systems
- Office gear: Desks, chairs, coffee machines
- Industrial kit: Lathes, 3D printers, factory machines
- Medical tools: Scanners, dental chairs, lab equipment
- Farm gear: Tractors, irrigation, storage units
Basically, if it has a resale value and helps you make money, there’s probably a finance option for it.
Is It Worth It?
Let’s weigh it out.
Pros:
- Frees up cash
- Lets you grow faster
- Predictable monthly costs
- Access to newer or better gear
Cons:
- You’re tied to a repayment plan
- Might end up costing more than buying outright
- Could hurt your credit if you miss payments
In the early stages of business, that trade-off can be worth it. You’re using someone else’s money to get your business off the ground, which is often better than going broke before launch day.
How to Get Asset Finance
You’ll need to prep a bit before you apply. Here’s a quick checklist:
- Business plan: Show them how you’ll make money.
- Credit check: Clean up your credit score if needed.
- Asset details: Know what you’re trying to finance.
- Financials: If you’ve started trading, bring your accounts.
Many asset finance companies work with new businesses, but they still want to know you’re serious. The better you prep, the better the deal you’ll get.
Real Talk: Should You Own or Lease?
This one depends on your business style.
If your tools won’t change much and you want to build equity in them, hire purchase is solid. You’ll pay less over time and own your stuff.
But if you’re in a fast-moving industry — like tech, media, or logistics — and need to stay nimble, leasing might suit better. You can upgrade often and don’t have to worry about maintenance or resale.
Tips for First-Time Asset Finance Users
- Start small. Don’t go nuts and finance everything on day one.
- Compare lenders. Banks, online lenders, specialist asset finance companies — get quotes.
- Watch for hidden fees. Some leases charge extra for wear-and-tear, early returns, or upgrades.
- Negotiate. Always. Rates and terms aren’t set in stone.
- Think ahead. Will this asset still be useful in three years? If not, maybe lease it instead of buying.
Common Mistakes to Avoid
- Overcommitting: Don’t take on more than you can pay off.
- Ignoring end-of-term details: What happens at the end of the lease? Read the fine print.
- Skipping insurance: If the asset breaks or gets stolen, you’re still paying for it. Get coverage.
- Not matching asset life to finance term: Don’t finance something over five years that’ll be obsolete in two.
Final Thoughts
Asset finance won’t solve all your startup problems. But it’s a sharp tool in the box. Used right, it can give you the space and speed you need to grow your business without emptying your wallet.
Just stay sharp — understand the costs, read the contracts, and keep your payments realistic. That way, you get the gear you need, keep your cash flow healthy, and give your business the best shot at surviving the brutal first year.
FAQs About Asset Finance for New Business
Q: Can I get asset finance with bad credit?
A: Yes, but it’ll be harder. You may pay higher interest or need a guarantor. Some lenders specialize in helping startups or those with thin credit files.
Q: Do I need a deposit?
A: Sometimes. Hire purchase usually requires a deposit. Leases often don’t. It depends on the lender and asset.
Q: What happens if I miss a payment?
A: Late fees kick in, your credit takes a hit, and the lender might take back the asset. Communicate early if you’re struggling.
Q: Can I finance second-hand assets?
A: Yep, many lenders allow it. Just check the age limit — some don’t finance stuff that’s too old or worn out.
Q: Is it tax-deductible?
A: Often, yes. Lease payments can usually be claimed as business expenses. But check with your accountant or tax advisor to be sure.
Q: Can I upgrade my assets mid-term?
A: Sometimes, especially with leases. You may be able to swap or upgrade for a fee.
Q: What’s the difference between lease and hire purchase?
A: With hire purchase, you own the asset at the end. With a lease, you don’t — unless there’s a buyout clause.
Q: Can I get asset finance before I launch my business?
A: Possibly, especially if you’ve got a solid business plan or personal credit. Some lenders back pre-launch ventures.
Bottom line:
Don’t let a lack of gear slow you down. Asset finance is one of the few ways you can get what you need now, and pay later — without giving up equity or getting buried in personal loans. Just stay smart, stay lean, and make sure every financed item earns its keep.