Business Finance, commonly known as asset finance, is a form of funding widely used by companies of all sizes to enable business to acquire business assets and spread the cost of purchasing the asset over its useful working life.

The types of equipment that can be financed is varied but includes such as items as plant and machinery, manufacturing and production equipment, commercial vehicles and trailers, IT and office equipment, company cars and vans.

The forms of finance available are; Hire Purchase & Conditional Sale, Finance Lease & Operating Lease & Contract Hire

Asset Finance

Hire Purchase & Conditional Sale

The most common finance contract, generically called HP or asset finance, it allows for a business to purchase essential operating assets now and spread the cost of the purchase over the useful life of the asset. Generally funding is available for items that have a quantifiable residual value at the end of the term of the finance agreement. Asset finance is most commonly used to acquire plant and machinery, computer and digital office equipment, cars, commercial vehicles and trailers. Hire Purchase (sometimes referred to as conditional sale) is classed as a purchase whereas finance lease is a form of rental and each product is treated differently from an accounting point of view. The VAT on the purchase price is paid at the outset of the agreement.


  • Financing for up to 100% of purchase price
  • VAT payment deferred to match cash flow of VAT reclaim
  • Payment structure agreed at outset can be designed to match cash flow if required
  • Final lump (or balloon) payment can help reduce regular payments where beneficial
  • Equipment can be purchased for nominal fee at end of term (option to purchase fee)

Finance Lease

Finance Lease is an alternative method of financing the acquisition of operational assets and is in effect a long term hire agreement. The lease is usually fully amortizing which means that the whole of the capital and the interest due are repaid during the term of the agreement, as with Hire Purchase. The core difference is that the VAT is payable on the rentals as they become payable and not at the outset of the agreement. This facility is useful for those businesses that do not wish to pay the whole of the VAT upfront on the purchase due to cashflow constraints or indeed may not be VAT registered so are unable to claim the VAT paid back on any purchases.


  • Financing for up to 100% of purchase price
  • Options to either continue renting equipment after the primary period, normally at reduced or nominal sum or, if permitted in the contract, sell it and retain a proportion of the cash proceeds when the lease term ends
  • VAT payable on rentals so it’s not necessary to pay VAT on equipment cost up front
  • Depending on asset type and term, it may be able to offset rental payments against profits and reduce tax liability
  • Payment structure agreed at outset can be designed to match cash flow if required
  • Final lump (or balloon) payment can help reduce regular payments where beneficial

Operating Lease & Contract Hire

Operating Lease or Contract hire gives a business the ability to hire an asset for a fixed period, with or without maintenance and other related services included, for a fixed period and return the asset to the leasing company at the end of the contract hire period. As the business is in effect only repaying the value of the depreciation in value of the asset (plus interest) during the term of the asset the repayments are generally less than those for a comparable hire purchase or finance facility. This form of funding is best suited to high value assets such as cars, commercial vehicles trailers and agricultural equipment. In certain circumstances, it can also be an effective way to acquire computers and IT equipment as well as a range of medical equipment.


An Operating Lease lets your business benefit from fixed costs based on a predicted annual use. The equipment remains the property of the Finance Company and will need to be returned at the end of the lease term.

  • With an Operating Lease, rental and return conditions are fixed/known at the outset
  • The costs of the lease are offset through the Profit and Loss account
  • The Finance Company carries the risk of the future value of the equipment
  • Potential for improved cash-flow through payments that are normally lower than Hire Purchase or Finance Lease and tax-efficient payments
  • VAT is payable on the rentals so it is not necessary to pay VAT on the equipment cost up front

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Asset Finance

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Highgrove, 32 Franklin Way, Barrow upon Humber, North Lincolnshire, DN19 7BJ

Telephone: 01522 420499

HAE Commercial Finance is a trading style of ECS Management Services Limited. ECS Management Services Limited, trading as ECS Group, are directly authorised and regulated by the Financial Conduct Authority (Registration Number 777473).

ECS Group are a commercial finance brokerage and not a lender. All quotations are subject to formal credit approval.