How asset finance works
Asset finance spreads the cost of business equipment over time, secured against the asset itself — which makes it accessible even for newer businesses or those with weaker credit. The best option depends on whether you want to own the asset eventually and how you account for it.
1. Hire purchase
You pay in instalments and own the asset at the end. Best for equipment you want to keep long term — vehicles, machinery, plant. Spreads cost while building ownership.
2. Finance lease
You rent the asset over a term, with the option to continue, return or sell it at the end. Best for businesses wanting use without ownership, often with tax and cash-flow advantages.
3. Operating lease / contract hire
Shorter-term rental where you return the asset at the end — common for vehicles. Best for assets you'll upgrade regularly and don't want to own or sell.
4. Asset refinancing
Release cash from equipment you already own by refinancing it, freeing working capital. Best for businesses needing cash flow that have valuable owned assets.
Why asset finance suits many businesses
- Accessible even with limited credit, as the asset is the security
- Preserves working capital — no large upfront outlay
- Potential tax and accounting advantages (take advice)
- Available for vehicles, machinery, IT, plant and more
How to find the best asset finance
A business finance specialist can match the right structure (HP vs lease vs refinance) to your needs and find competitive rates. Find a business finance specialist through Nesto — free, no obligation.
Frequently asked questions
What is asset finance?
Funding that spreads the cost of business equipment, vehicles or machinery over time, secured against the asset itself.
What's the difference between hire purchase and leasing?
With hire purchase you own the asset at the end; with leasing you rent it, with options to return, continue or upgrade.
Can I get asset finance with bad credit?
Often yes — because the asset is the security, asset finance is more accessible than unsecured borrowing for businesses with weaker credit.
What is asset refinancing?
Releasing cash from equipment you already own by refinancing it, freeing up working capital.
Are there tax advantages?
There can be, depending on the structure and your accounts — take advice from your accountant on the treatment that suits you.