Asset finance for limited companies
Need a van, a machine or equipment for your business? Asset finance can help you get it without paying the full purchase price upfront.
An asset is something the business uses, such as a vehicle, machinery or equipment. With asset finance, you usually make payments over time. Whether you eventually own the item depends on the agreement.
Do you want to own it or use it?
Two common arrangements are hire purchase and leasing.
| Hire purchase | Leasing | |
|---|---|---|
| What are you paying for? | A route towards owning the item. | The use of the item for an agreed period. |
| Who owns it during the agreement? | The finance provider. | The finance provider. |
| What happens at the end? | Ownership normally passes to your company once all required payments and conditions are met. | You may return it, continue renting or agree another arrangement. Check the terms; ownership does not automatically pass to you. |
Start with how long you expect to need the item and whether owning it matters to your business.
A company van: what would you compare?
Imagine your company needs a van for deliveries.
You expect to keep it for several years, so owning it may matter. Or you may prefer to use a van for a set period and replace it afterwards.
Before comparing quotes, write down:
- How long you expect to use the van.
- How many miles it is likely to cover.
- How much you can pay upfront.
- What regular payment the business can manage.
- Whether you want to own it at the end.
Then ask each provider to explain how its offer fits those needs. A smaller monthly payment may come with a larger upfront payment, a final payment or conditions on how you use and return the vehicle.
The same approach works for machinery and equipment: start with the job it needs to do and how long you expect to use it.
Check the whole agreement
Ask these questions before choosing:
- What do we pay at the start? Include any deposit, initial rental or fees.
- What do we pay regularly? Check the amount, frequency and whether payments can change.
- Is there a final payment? Some agreements leave a larger amount to pay at the end, sometimes called a balloon payment.
- Is VAT included in the quote? Ask when it must be paid so you can compare figures on the same basis.
- Who pays for insurance, servicing and repairs? Don’t assume these are included.
- Are there limits on use? For a vehicle, ask about mileage and charges for damage or excess use.
- What happens if we want to end the agreement early? Ask about the cost and what happens to the item.
Also ask what would happen if your company missed payments. The provider may be able to take back the item.
Already own equipment and need cash?
Asset refinance means raising money against an asset your business already owns, such as equipment or a vehicle, while continuing to use it.
It creates a new financial commitment. Ask how ownership is affected, what payments are required and whether any existing finance must be repaid.
Not every asset can be refinanced. The provider will need to assess the item and your business.
What information should you have ready?
A supplier quote is a useful starting point. It should describe the item, its price and whether it is new or used.
For a used vehicle or machine, details such as age, mileage or operating hours may also be relevant. Explain what it will do for your business and when you need it.
Read Eligibility and preparation for the company information a provider may ask for. If a personal guarantee is requested, our Personal guarantees and security guide explains what that could mean for you.
Should you also consider a business loan?
A business loan may be another way to pay for the purchase. Compare the total cost, payments, ownership and any security requirements rather than assuming one approach is always cheaper.
Find a funding provider
Tell CapSage about your company and the vehicle, machinery or equipment you need funding for.
If we identify a suitable provider, we’ll introduce you so you can discuss the options. The provider decides whether to offer funding.
You don’t pay a fee to use CapSage’s assessment and matching service.