Asset finance
Need to buy a van, upgrade machinery, or invest in technology - without draining your cash flow?
Asset finance lets your business spread the cost of essential equipment over time, so you can invest in growth without tying up working capital. Compare options from 120+ UK lenders with Funding Options by Tide.
Asset finance: what it is and how it works
What is asset finance?
Asset finance is a type of funding that helps businesses acquire or refinance physical assets. Rather than paying for equipment upfront, you either lease it or spread the cost over a fixed term. It’s a flexible way to get the tools your business needs - while preserving capital for other priorities.
You can also use asset refinance to unlock cash from assets you already own by borrowing against their value.
Types of asset finance
Hire purchase Own the asset at the end of the agreement. You pay in instalments, and once the final payment is made, the asset becomes yours.
Finance lease Use the asset for a set period while making regular payments. You don’t own the asset but may extend the lease or upgrade at the end.
Operating lease Ideal for short-term use or equipment that depreciates quickly. You only pay for the time you use the asset.
Asset refinance Release cash from assets you already own. Useful for improving cash flow or funding new investments without selling equipment.
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
Get quotes instantly
Our smart technology will compare quotes from up to 120+ lenders to help you find the ideal business loan.
Apply for a Business Loan 🎉
We'll be there to guide you through every step of the process.
Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 120 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 120+ lenders
Access a wide range of trusted lenders: from high street banks to alternative finance providers.
No fees or obligations
Our service is completely free to use. You’re in control of who you borrow from.
Fast, personalised results
Get real-time matches based on your business profile and funding needs.
Expert support when you need it
Our team is here to help — by phone, chat, or email.
Trusted by over 21,000 customers
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
Is asset finance right for your business?
Asset finance is suitable for:
UK-based limited companies, sole traders, and partnerships
Businesses needing vehicles, equipment, or plant
Companies with regular cash flow or trading history
Those seeking to preserve cash for day-to-day operations
It may not be suitable if you have poor credit or operate in sectors with volatile cash flow and asset depreciation.
Asset finance vs business loan
Feature | Asset finance | Business loan |
Use of funds | Tied to specific asset | Flexible |
Ownership | May or may not own | Not linked to an asset |
Collateral | Asset-secured | May require personal guarantee |
Repayments | Fixed, tied to asset | Fixed |
Suitable for | Vehicles, machinery | Working capital, marketing |
What lenders look for
Lenders typically assess:
Credit history and financial health
Business trading history
Value and type of asset
Purpose of use
Deposit or residual value (if applicable)
Providing up-to-date accounts and accurate equipment details can help speed up approval and secure better rates.
How to apply for asset finance
1. Decide what you need
Confirm the type and cost of the asset
2. Compare your options
Choose between leasing, hire purchase, or refinance
3. Get matched with lenders
Funding Options by Tide can connect you to a wide panel
4. Submit documents
Financials, proof of ID, and equipment quotes
5. Receive a decision
Often within 24–48 hours
6. Access the asset
Once approved, you can order the equipment or release equity
Alternatives to asset finance
For broader working capital
Business loans can provide a lump sum to support day-to-day operations or larger growth plans.
Flexible access to funds as needed
Revolving credit facility lets you draw down as needed, only paying interest on what you use.
For assets needed short-term
Equipment leasing helps you get the assets you need without the upfront cost of ownership.
Release funds tied up in unpaid invoices
Invoice finance allows you to release working capital without waiting for clients to pay.
Based on card revenue
Merchant cash advance gives you a flexible repayment model tied to your revenue.
Specifically tailored for vans, lorries, and fleet vehicles
Commercial vehicle finance is tailored for vans, HGVs, or fleet upgrades.
Learn more about asset finance
Asset finance vs asset refinancing: what’s the difference?
Asset finance enables you to purchase a new item, for example, if a farmer wanted to utilise more of his farm by purchasing or leasing a new tractor, asset finance could help him make the acquisition.
On the other hand, asset refinancing offers you the flexibility to use an asset you already own as security against a new loan. Using a similar example, in this case, if the farmer already owned the tractor but wanted to free up some cash to purchase some new seeds, he could obtain asset refinancing by putting up the tractor as collateral.
Is your business eligible for asset finance?
Lenders may look at one or several of these things to assess eligibility:
Creditworthiness: Lenders sometimes look at your company or personal credit score to assess how likely you are to repay the loan.
Affordability: They may consider your income as a business and any expenses you’re currently paying to determine if you can afford the loan.
Asset eligibility: Some lenders like to understand the specific assets being financed and may base their approval decision on that information. For example, if you’re obtaining asset financing for a vehicle, some lenders only provide financing for newer models with lower mileage.
Valuation: Lenders often conduct internal assessments to verify if the value of the asset aligns with the purchase price. Since the asset serves as security for the loan, lenders might decline an application if they believe the asset's value does not cover the loan amount.
Some drawbacks to be aware of
Less flexibility: Payment terms are usually set at the beginning of the loan term and must be adhered to.
Repossession: If you do not make your monthly payments in a timely manner the asset may be repossessed.
Ownership: The lender usually owns the asset until the last payment is made and, in some cases, ownership is never transferred to you. Ensure you carefully assess the lending terms and are happy with the final outcome of the loan.
Limited use: Some providers put limits on the asset’s usage. A popular example is mileage limits being placed on leased vehicles. Also, if you damage the asset you may be liable to pay.
What’s the difference between hire purchase and leasing?
Hire purchase lets you own the asset at the end of the term, while leasing means you're renting it — often with the option to upgrade or purchase later. More on finance lease vs operating lease.
Can I get asset finance as a startup?
Yes, many lenders offer asset finance to new businesses, especially if the asset has resale value.
Do I need a deposit?
Some agreements may require a deposit, but others can offer 100% financing depending on your credit profile and the asset type.
Is asset finance tax-deductible?
Yes. Many types of asset finance qualify for capital allowances like AIA or allow VAT reclaim, depending on the agreement type.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Asset Lending & Property Team Lead
Vivek Seda is the Asset Based Lending & Property Team Lead at Funding Options. Vivek has been in the commercial finance industry for over five years, helping SMEs in the UK access over £40m of funding in that time. He also supports the business on working on corporate finance and structured transactions successfully funding Acquisitions and MBOs for businesses.