Asset Finance and Equipment Leasing

Asset finance lets your business acquire the vehicles, machinery and equipment it needs while spreading the cost over time, preserving cash instead of paying a large sum upfront. Because the asset itself is the security, it is often available where unsecured borrowing is not, and it usually costs less. Sadi's Commercial Finance is an NACFB and FIBA registered commercial finance brokerage and arranges asset finance across a panel of specialist lenders, matching the structure to the asset and your budget.

Who it is for: businesses buying or upgrading vehicles, plant, machinery, IT or other equipment, and those wanting to release cash from assets they already own.

How asset finance works

A lender buys the asset, or lends against one you already own, and you pay for the use of it over an agreed term. At the end you either own it outright, hand it back, or continue on a secondary rental, depending on the structure you chose at the start.

Because the lender holds security in the asset, the decision rests heavily on what the asset is and how well it holds value, not only on your accounts. That is why a business that struggles to get an unsecured loan can often still finance a machine.

The main structures

  • Hire purchase, where you pay a deposit and fixed instalments and own the asset outright at the end. Suits assets you will keep for a long working life.
  • Finance lease, where you rent the asset for a primary term with the option to continue, sell it on the lender's behalf or return it. The asset sits on your balance sheet.
  • Operating lease and contract hire, where you use the asset for a set period and hand it back, with residual value risk sitting with the lender. Common for vehicles.
  • Refinance, releasing capital from assets you already own while continuing to use them.
  • Sale and leaseback, selling an owned asset to a funder and leasing it back, turning fixed assets into working capital.
  • Block or master facilities, a pre agreed line for businesses that buy equipment regularly, so each new asset draws down rather than starting a fresh application.

What can be financed

  • Commercial vehicles, vans, trucks, trailers and specialist bodies
  • Construction plant, excavators, telehandlers and access equipment
  • Manufacturing machinery, CNC, packaging and production lines
  • Agricultural machinery and equipment
  • Catering and refrigeration equipment
  • Medical, dental and veterinary equipment
  • IT hardware, servers, EPOS and audio visual
  • Shop and office fit outs, furniture and racking

Key features

  • Hire purchase, leasing and refinance across one panel
  • VAT deferral options on hire purchase
  • Soft and hard assets both supported
  • Fixed, predictable monthly payments that make budgeting and pricing easier
  • New and used equipment financed
  • Terms typically two to seven years depending on the asset

How to get asset finance with Sadi's Commercial Finance

  1. Speak to a specialist. Tell us which vehicle, machinery or equipment you need funding for and when you need it. We respond the same working day.
  2. Share asset and budget details. The asset cost and supplier quote, or details of assets you already own if you are refinancing.
  3. Choose the structure. We work through whether hire purchase, leasing or refinance suits your ownership plans, cash flow and accounting treatment.
  4. Get matched with a specialist lender. We source terms from lenders who actually understand your asset type rather than submitting everywhere.
  5. Compare offers on total cost. Deposit, monthly payment, term, balloon or residual and any option to purchase fee, side by side.
  6. Asset delivered, payments begin. Funds release to the supplier, or into the business on a refinance, and fixed monthly payments start.

What lenders assess

The asset comes first: its type, age, condition, specification and how readily it could be resold. A machine with a deep second hand market is easier and cheaper to finance than a bespoke one. Age limits are usually applied to the asset's age at the end of the agreement rather than the start, which is what determines the maximum term on used equipment.

After the asset, the lender looks at your accounts and management figures, existing finance commitments, the directors' experience and credit position, and whether there is contracted work behind the purchase. Evidence that the equipment is going straight onto a signed contract is one of the strongest things you can put in front of an underwriter.

What it costs

Pricing depends on the asset, the deposit, the term and the strength of the business. Deposits are commonly around 10 to 20% on hire purchase, though nil deposit deals exist for strong covenants and some agreements let you defer the VAT for the first quarter. There is normally a documentation fee, and on hire purchase an option to purchase fee at the end.

Because the asset is the security, asset finance is generally cheaper than unsecured borrowing for the same purpose. Watch the balloon payment on lease and contract hire structures, since a low monthly payment can hide a large sum due at the end. Our broker fee is disclosed in writing before you commit, and we present the total cost of each offer.

How long it takes

A straightforward single asset case for an established business can be agreed within days and paid out within one to two weeks once documentation and supplier details are confirmed. Larger facilities, refinance and sale and leaseback take longer because existing assets need to be verified and any outstanding finance settled.

Case study

A logistics firm financed £120k worth of fleet upgrades via hire purchase, with fixed monthly payments over 4 years.

Why use a broker rather than supplier finance

Supplier and dealer finance is convenient, but it is one funder's product offered at the moment you are least likely to shop around. Different lenders favour different assets and sectors, and the spread between the best and worst terms on the same machine is often substantial. We know who lends on what, so you get a structure that fits and a payment you can plan around.

We are registered with the NACFB and FIBA, and we are paid to find the right structure rather than to place a particular lender's paper.

Frequently asked questions

What is the difference between hire purchase and leasing?

With hire purchase you own the asset at the end of the agreement. With a lease you use it for a set period and then hand it back, renew, or in some structures sell it on the lender's behalf.

Can I refinance equipment I already own?

Yes. Refinancing existing assets releases working capital back into the business while you carry on using them, which is a common way to fund growth without new borrowing against property.

What are soft and hard assets?

Hard assets such as vehicles and machinery hold resale value. Soft assets such as IT, furniture and fit outs depreciate faster. Both can often be financed, though soft assets usually need a stronger business behind them.

Can I finance used equipment?

Yes, routinely. Lenders normally cap the asset's age at the end of the agreement, so age affects the maximum term available rather than ruling the deal out.

Do I need a deposit?

Usually, commonly around 10 to 20% on hire purchase, but it depends on the asset and the strength of the business. Nil and low deposit structures are available for established borrowers.

Is asset finance better than a business loan for buying equipment?

Usually, yes. Because the equipment is the security, the rate is normally lower and approval easier, and it leaves your unsecured borrowing capacity free for other things.

What are the tax and accounting implications?

They differ by structure. Hire purchase generally lets you claim capital allowances on the asset, while lease rentals are typically treated as an operating expense. Your accountant should confirm the treatment for your business before you choose.

What happens if the equipment breaks or is written off?

You remain responsible for the agreement, which is why insurance is normally required. On a write off the agreement is settled from the insurance proceeds and any shortfall or surplus is dealt with under the terms.

Related guides

Speak to us about asset finance

Send us the quote or the asset list and we will come back with realistic structures and costs. We respond the same working day. Contact Sadi's Commercial Finance.