Commercial finance · Equipment
Asset finance: spreading the cost of equipment and vehicles over their working life
Asset finance lets a business use machinery, vehicles or technology now and pay for them in instalments, with the asset itself supporting the agreement. Ocean Capital Exchange introduces businesses to third-party asset finance providers.
Definition
What asset finance is
Asset finance is funding secured on a specific business asset, where a provider buys or funds the asset and the business pays for its use, or its eventual ownership, through regular instalments over an agreed term.
Because the provider has the asset as security, assessment focuses on the asset's value and expected life as well as on the business.
The main forms are hire purchase, where ownership passes to you after all contractual payments are made, and refinancing, which releases cash from assets a business already owns.
At a glance
- Funds
- Machinery, vehicles, plant, technology and other identifiable assets
- Main forms
- Hire purchase and business asset refinancing
- Deposit
- May be required; set by the provider
- Balloon
- An optional larger final payment, where agreed
- Security
- The asset itself; guarantees may also be requested
- OCE's role
- Introducer to third-party providers; not a lender
Suitability
Which businesses it tends to suit
Asset finance suits businesses acquiring tangible assets that hold value and generate income over several years.
Usually a fit
- Businesses buying machinery, vehicles or equipment with a working life longer than the finance term.
- Firms that prefer predictable monthly costs to a large upfront purchase.
- Businesses with valuable owned equipment seeking to release cash through refinancing.
- Growing operators adding capacity, such as extra vehicles or production lines.
Usually not a fit
- Intangible spending such as marketing, salaries or software subscriptions with no resale value.
- Assets that become obsolete faster than the finance term.
- Very specialised assets with little resale market, which providers may be reluctant to fund.
- Businesses that need cash for general working capital rather than a specific asset.
Process
How an asset finance agreement works
The application steps for hire purchase or refinancing are broadly similar.
- 01
Choose the asset
You select the equipment and supplier and obtain a quote.
- 02
Provider assesses
The provider reviews the asset, its value and your business.
- 03
Deposit paid
If required, you pay a deposit; the provider funds the balance.
- 04
Asset delivered
The provider pays the supplier and you take delivery and use the asset.
- 05
Instalments
You pay the agreed instalments over the term.
- 06
End of term
Under hire purchase, ownership passes only after the final payment and any option fee are made. Refinancing may involve the lender taking security or a sale and HP-back arrangement, which does not necessarily mean the business retains unencumbered legal ownership throughout the process.
Accounting and tax treatment differ for hire purchase and refinance agreements. Take advice from your accountant; this page does not cover specific tax treatment.
Comparison
Hire purchase and refinance compared
The key differences are ownership and what happens at the end.
| Hire purchase | Refinance | |
|---|---|---|
| Ownership | Normally passes to you at the end | You sell or charge an asset you own |
| Purpose | Acquire and eventually own | Release cash from existing assets |
| End of term | Final payment, then ownership | Repaid by instalments |
| Deposit | Often required | Not applicable |
In practice
Typical uses
Assets commonly financed include:
- Vehicles and fleets
- Vans, HGVs and company vehicles.
- Plant and machinery
- Production, construction and agricultural equipment.
- Technology
- IT hardware, servers and specialist equipment.
- Refinancing
- Releasing cash tied up in equipment already owned.
- Asset priceAssumed figure
- £60,000
- DepositAssumed 20% of price
- £12,000
- Financed balance
- £48,000
- Monthly instalment at an assumed 8% a year, no balloonStandard amortising calculation, 48 payments
- £1,171.82
- Total instalmentsInterest element £8,247.37
- £56,247.37
- With a £10,000 balloon insteadTotal instalments plus balloon £57,729.17
- £994.36 a month
Hypothetical arithmetic only. The deposit, 8% rate and balloon are assumptions to show how the calculation works, not typical or offered terms. Fees are excluded. A balloon lowers monthly payments but increases the total paid.
Weighing it up
Benefits and material limitations
Asset finance aligns cost with use, but the commitment runs for the full term.
Benefits
- Preserves cash
- Avoids a large upfront outlay.
- Predictable payments
- Fixed instalments help budgeting where the rate is fixed.
- Asset-backed
- The asset supports the agreement, which may reduce reliance on other security.
Material limitations
- Repossession risk
- The provider can recover the asset if payments are missed.
- Total cost
- Interest and fees mean you pay more than the cash price.
- Balloon risk
- A balloon must be paid or refinanced at the end.
- Early settlement
- Ending early may carry settlement charges.
- Asset condition
- Hire purchase agreements involve contractual payment schedules to clear the debt.
- Guarantees
- Personal guarantees may be requested.
Why Ocean
Finance the asset without losing sight of cash flow
Ocean helps you consider the asset, how long you expect to use it and the effect on working capital, then discusses relevant third-party providers rather than limiting the enquiry to one bank's asset product.
Industry context, not just an application form
We discuss how your business trades, when money comes in and what the funding must achieve, so sector-specific cash-flow pressures form part of the conversation.
Access to a wide panel
Ocean works with a wide panel of third-party lenders and specialist finance providers. That gives you options beyond one bank's product range, subject to provider appetite and eligibility.
The product should fit the business
We help establish whether a loan, invoice facility, asset funding or another structure fits the requirement, rather than starting with whichever product a single bank has available.
Compare the terms that matter
Look beyond a headline rate. We help you understand the fees, repayment pattern, security, guarantees and exit conditions relevant to the options being discussed.
Less repeated legwork
A central point of contact helps organise the initial enquiry and information for relevant providers. It can reduce repeated explanations, although lenders may still require their own applications and checks.
Help asking the right questions
We help clarify what providers need and what to check before proceeding. You retain control of the decision and can take independent legal, financial or tax advice where needed.
For this product
Ownership, deposits and final payments all matter
We help you compare hire purchase and refinancing, including ownership conditions, deposits, repayment timing, any final balloon and end-of-contract requirements. The asset type, condition, business strength and provider's terms determine which structures may be available.
Ocean Capital Exchange acts as a broker and introducer, not a lender. We do not make lending decisions or guarantee that a provider will make an offer. Introductions are limited to providers available through our panel; each provider sets its own eligibility, terms and credit decisions.
Meet the Ocean team · Read our company and provider disclosures
Due diligence
What providers assess
Each provider applies its own criteria. Areas commonly reviewed include:
- The asset
- Type, age, value, expected life and resale market.
- Supplier
- Whether the supplier is established and the quote is genuine.
- Affordability
- Whether trading cash flow covers instalments.
- Financial history
- Accounts and credit history of the business and directors.
- Existing commitments
- Other finance agreements and charges.
Information often requested
- Supplier quotation or asset details
- Recent accounts and management accounts
- Business bank statements
- Details of existing finance agreements
Indicative only. Providers set their own requirements. Ocean Capital Exchange does not make lending decisions.
Pricing structure
Costs and repayment
Pricing is quote-specific. Cost components to look for:
- Interest or finance charge
- Built into the instalments over the term.
- Deposit or initial payment
- Paid at the start, reducing the financed balance.
- Documentation fees
- Charged at set-up, where applicable.
- Option-to-purchase fee
- A final fee under hire purchase to transfer ownership, where included.
- Balloon payment
- A larger final payment, if chosen.
- Settlement and return charges
- For early settlement or account closure.
Repayment and settlement
- Instalments are usually fixed monthly or quarterly payments.
- A balloon, where agreed, falls due at the end of the term.
- Missing payments can lead to recovery of the asset.
- Early settlement is possible under many agreements, subject to charges.
Checklist for comparing quotes
- 1.Total amount payable including deposit, balloon and fees
- 2.Fixed or variable rate
- 3.Ownership at end of term
- 4.Early settlement terms
- 5.Maintenance and insurance obligations
- 6.Guarantees required
Repayment illustration
Compare asset repayment structures
Use Quick estimate to compare illustrations for strong, moderate and challenged financial profiles from an asset price and term. Choose Compare my quote for your provider's deposit, rate, fees and balloon payments. The calculator provides hire purchase options. All figures exclude VAT. These are alternative illustrations, not costs to add together or lender offers; finance is subject to provider approval.
The financed asset may be repossessed if payments are not made.
Illustrative example only
Your actual quote may be entirely different after a lender or finance provider reviews your financial information and funding requirements. These figures are not a lending decision or an offer of finance.
Your estimate
Enter your asset price, excluding vat to see an estimate.
0 of 1 required figures entered
The financed asset may be repossessed if payments are not made.
Hire purchase repayment illustration
Enter your asset price excluding vat, deposit / upfront contribution, finance amount, term in months, annual rate, hp final balloon, upfront arrangement fees to see the breakdown.
1 of 8 required figures entered
Illustrative only, not a binding finance offer. Costs vary by lender and applicant; additional fees may apply and eligibility is subject to assessment. Ocean Capital Exchange is an introducer, not the lender. The asset may be repossessed if payments are not maintained. HP ownership depends on meeting the contract's payment and purchase conditions. VAT, tax and accounting treatment require professional advice. The financed asset may be repossessed if payments are not made. How this calculator works.
Discuss asset finance options
Speak to our team whenever you’re ready. You don’t need to complete this calculator to discuss your options or request a quote.
Our enquiry form opens in a new tab. Calculator figures are not sent automatically; include any you would like us to review.
Want to discuss these figures? Open our enquiry form (opens in a new tab). Calculator figures are not transferred automatically, so please include any you want us to review.
Industry guides
Finance for your equipment
Explore how this type of finance can work for your business, including common uses and points to consider.
- Access platforms
- Aesthetic equipment
- Agricultural machinery
- Beauty salon equipment
- Car wash equipment
- Centre lathes
- CNC machinery
- Commercial bakery equipment
- Commercial kitchen equipment
- Commercial laundry equipment
- Commercial refrigeration equipment
- Commercial vehicles
- Construction equipment
- Dental equipment
- Electric Vans
- Excavators
- Food processing machinery
- Forklifts
- Garage and MOT equipment
- Gym equipment
- HGVs
- Industrial welding equipment
- Injection moulding machines
- IT and server equipment
- Laser cutting machines
- Manufacturing machinery
- Medical equipment
- Packaging machinery
- Plant machinery
- Printing machinery
- Refrigerated Vans
- Renewable energy equipment
- Scaffolding equipment
- Used Vans
- Vans
- Vehicle diagnostic equipment
- Veterinary equipment
- Warehouse automation
- Woodworking machinery
Asset finance questions
Still unsure? Call +44 20 7183 2026.
How does hire purchase influence total cost and ownership for my business?
Under hire purchase, ownership passes to you only after all contractual payments and any applicable purchase option fee are satisfied.
What is a balloon payment?
A larger final payment that reduces regular instalments. Where interest is charged, leaving more principal outstanding usually increases the overall interest cost. The balloon must be paid or refinanced at the end; refinancing is not guaranteed.
Can I finance used equipment?
Some providers fund used assets, subject to age, condition and value. Criteria vary.
What is asset refinancing?
Releasing cash from equipment you already own, either by selling it to a provider and buying it back in instalments, or by borrowing against it.
Do I need a deposit?
Some agreements require one; others do not. The provider decides.
Who insures and maintains the asset?
Usually the business, as set out in the agreement.
What happens if I miss payments?
The provider may charge default fees and can recover the asset under the agreement.
How is asset finance treated for tax?
Treatment depends on the agreement type and your circumstances. Ask your accountant.
Independent background reading
These independent sources explain general concepts. They do not endorse Ocean Capital Exchange or confirm our providers, product availability or terms. Your provider’s agreement takes precedence over an illustration.
Important information
Ocean Capital Exchange Ltd introduces businesses to third-party providers of asset finance. We are not a lender, do not make credit decisions and do not guarantee that finance will be offered or on what terms. Any facility is subject to the provider's own assessment, due diligence, approval and documentation.
The asset may be repossessed if you do not keep up payments under the agreement.
This page is general information, not financial, legal or tax advice. Worked examples and calculator results are hypothetical arithmetic based on assumed or visitor-entered figures; they are not quotes, offers or typical terms. Business finance may require security or personal guarantees. Read any agreement carefully and take independent advice where appropriate.
Talk through the equipment you need
Tell us about the asset, its cost and how long you will use it. We can explain the options and introduce suitable providers.
- Or call
- +44 20 7183 2026
- Office
- 73 Watling Street, London, EC4M 9BJ