Need equipment for your business but don’t want to pay upfront? Hire purchase might be your perfect match
Hire purchase lets you get the equipment you need now while spreading the cost over time. You’ll make regular payments and eventually own the asset outright. Think of it as ‘buy now, pay later’ for your business essentials
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Don't let cash constraints hold your business back. With hire purchase, you can get your hands on that essential equipment right away, without waiting months to save up. Whether it's a new delivery van, manufacturing equipment, or office tech, you can start using it to grow your business from day one. No more missed opportunities because you couldn't afford the upfront investment.
Keep your business finances healthy with predictable monthly payments that fit your budget. Instead of one massive hit to your bank account, hire purchase breaks the cost into digestible chunks that won't disrupt your cash flow. This means you can invest in other areas of your business simultaneously, whether that's marketing, staff, or inventory. Smart businesses know that keeping cash available is often more valuable than saving a few pounds on interest.
Here's where things get interesting for your bottom line. With hire purchase, you can typically claim the interest on your payments as a business expense. Plus, once the asset is on your books, you can claim depreciation too. This could significantly reduce your tax bill compared to some other financing options. Of course, everyone's tax situation is different, so have a quick chat with your accountant to maximize these benefits for your specific circumstances.
Business is unpredictable enough – your equipment costs shouldn't be. Hire purchase agreements typically come with fixed interest rates, meaning your payment amounts won't suddenly jump up if market rates change. This predictability makes budgeting simpler and removes the worry about variable payment amounts. You'll know exactly what's going out each month for the entire term, letting you plan your finances with confidence.
Unlike leasing where you're essentially renting forever, hire purchase leads to full ownership. Each payment brings you closer to owning that asset outright. Once you make that final payment, the equipment is 100% yours – no more monthly outlays, and you're free to keep using it, sell it, or trade it in. This builds your business assets over time, strengthening your balance sheet and potentially increasing your business valuation if you ever decide to sell.
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Took the pressure off the company's quarterly cash flow and allowed them to continue delivering new and existing contracts. A national telecommunications company approached Business Finance House as they needed quick funding for a £200,000 VAT bill. We were able to arrange a same-day loan for the full amount that was repayable over 3 months. View Client Success Stories
Boosted cash flow and maintained operations A national materials wholesaler needed flexible working capital to manage short-term VAT obligations. With minimal security requirements, our lender provided a £250k 3-month facility, enabling the business to preserve cash flow and strategically manage HMRC payments without disrupting operations. View Client Success Stories
Maintained Cash Flow & Paid HMRC on Time A southern-based law practice had a hefty VAT bill that would have been a struggle to pay in one lump sum. They approached us requiring a 3-month VAT loan that would get the bill paid on time and not disrupt their cash flow. We were able to source a loan for the full amount within days and the lender did not require personal guarantees. View Client Success Stories
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Hire purchase is an agreement where you pay for equipment in installments while using it. Unlike a traditional loan, you don’t legally own the asset until you’ve made the final payment. The finance company purchases the equipment and essentially “hires” it to you until you’ve paid in full. This gives the lender security, as they can repossess the asset if payments aren’t made – which often means better rates for you.
Most established businesses trading for at least 1-2 years with reasonable credit history qualify. We work with lenders who consider startups too, though you might need a stronger deposit or personal guarantee. There’s no strict minimum turnover requirement, but lenders will want to see that your cash flow can comfortably cover the repayments.
Typically between 10-20% of the asset’s value, but this can vary. Some lenders offer low-deposit or even no-deposit options for well-established businesses with strong credit profiles. The general rule: the larger your deposit, the lower your monthly payments and overall interest costs will be.
Usually between 1-7 years, depending on the type of asset. Vehicles and machinery typically qualify for longer terms (up to 5-7 years), while IT equipment and technology might be limited to shorter terms (1-3 years) due to their faster depreciation. We’ll help match the term to the expected useful life of your equipment.
You can typically settle early by paying a lump sum, which is usually the remaining capital plus a small settlement fee. Many agreements offer reduced settlement figures after a certain period. We’ll always check the early settlement terms before you sign and explain any potential penalties clearly.
Yes, and they’re quite attractive. You can usually claim the interest portion of your payments as a business expense. Additionally, as the asset is considered “on your books” for accounting purposes, you can claim capital allowances on the depreciation. Some businesses can even claim 100% of the asset cost against taxable profits in year one through the Annual Investment Allowance.
Almost any business asset with a resale value qualifies, including vehicles, machinery, construction equipment, office furniture, catering equipment, agricultural machinery, and certain technology assets. Highly specialized or bespoke equipment might require additional assessment, but solutions are often available.
Hire purchase agreements appear on your business credit file, but they’re viewed more favorably than traditional loans because they’re secured against a specific asset. A well-managed hire purchase agreement can actually improve your credit profile by demonstrating reliable payment history. We can advise on how to structure your finance to maintain maximum borrowing capacity.
Once you make your final payment (sometimes including a nominal “option to purchase” fee of £1-100), you become the legal owner of the equipment. The finance company will send you documentation confirming the transfer of ownership, and the asset is yours to keep, sell, or trade in – with no further payments required.
Yes, many lenders offer the option to include service packages, extended warranties, or maintenance contracts within your hire purchase agreement. This lets you spread these costs over the term rather than paying upfront. Be aware this will increase your monthly payments, but can make budgeting easier with one predictable monthly cost covering everything.
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Business Finance House Ltd is an independent Asset finance broker not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice.
Business Finance House Ltd will receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. Business Finance House Ltd is an appointed representative of AFS Compliance Ltd which is authorised and regulated by the Financial Conduct Authority under number 625035.
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