Work out what asset finance will cost each month
Asset finance spreads the price of equipment, machinery or a vehicle over a fixed term. The asset itself usually acts as the security, so lenders can offer finance with little or no deposit and a payment you can plan around.
Enter the price of the asset, the deposit, the term and the type of agreement, and the calculator shows the monthly payment, the finance charge and the total you will have paid. Hire purchase and finance lease can be compared side by side, and there is a second tab that works backwards from a monthly budget to the asset price it supports.
Asset finance calculator
Every figure is an estimate. The starting rate follows the asset type you choose, and you can type over it with a rate you have been quoted.
Asset Finance Calculator
Work out the monthly payment and total cost of hire purchase or a finance lease.
Get a formal quote
Happy with the figures? Open the form below and your results are added to the message box for you. Add your details and anything else we should know, send it, and a specialist will come back with lender options and a formal quote.
How the asset finance calculator works
Start with the asset. Enter the price excluding VAT and choose the type: commercial vehicle, plant and machinery, specialist or older equipment, IT and technology, or agricultural equipment. The type sets a typical starting rate, because lenders price a new van and a second-hand specialist machine very differently.
Next, the deal. Add a deposit, choose a term from one to seven years, and pick hire purchase or finance lease. You can also enter a balloon, which is a final payment held back to the end of the term. A balloon lowers every monthly payment and leaves a lump sum to clear, refinance or settle by selling the asset.
Press calculate and the results appear underneath: monthly payment, amount financed, finance charge, and what the whole thing costs once your deposit is counted in. VAT sits on its own line. If you’re VAT registered you’ll get it back, though on hire purchase you pay it up front and reclaim it later, which can pinch cash flow in month one. Better to see that number now than at the dealer’s desk.
Don’t have a payment in mind yet? Flip to the affordability tab. Put in what you’d be happy to pay each month, choose a term and a rate, and out comes the asset price that figure supports.
Hire purchase or finance lease
On a bank statement they look nearly the same. Underneath, they’re different animals.
Hire purchase ends with you owning the asset. You make the instalments, pay a small option-to-purchase fee alongside the last one, and the machine or vehicle is yours. For tax, the hirer claims the capital allowances, so they come to you, and only the interest portion of each payment is a finance cost.
A finance lease never transfers ownership. The lender holds the title and you rent the asset for the term. At the end you usually have three routes: carry on renting for a nominal sum, sell it on the lender’s behalf, or hand it back. Rentals are normally deductible as a running cost, and it’s the lender who claims the allowances.
VAT catches people out. Hire purchase charges it on the full price at the outset. A VAT-registered business reclaims it, but the cash leaves first. A lease charges VAT rental by rental, so there’s no big VAT bill at the start. Which one suits you comes down to your profits, your year end and how long you’ll keep the asset. Run it past your accountant before you sign.
How deposit, term and balloon change the cost
Three dials, and they don’t all turn the same way.
Put more down and you borrow less, so the payment and the interest both drop. Lenders like that as well, which is why a deposit of 10% to 25% often earns a better rate.
Going the other direction, a longer term or a balloon makes each payment smaller by pushing cost into the future. Cash flow feels easier in year one. You pay for it in total interest.
Here’s how that looks on real figures.
£85,000 of machinery over five years
A manufacturer wants a CNC machine at £85,000 excluding VAT and puts down 10%, so £8,500. That leaves £76,500 to finance. At 9.5% over five years, hire purchase works out at about £1,607 a month and about £19,900 in finance charges.
Stretch it to seven years and the payment drops to about £1,250, which is £356 a month easier. The finance charge climbs to about £28,500, around £8,600 more. Is that worth it? Only the business can say. It comes down to how much the monthly breathing room is worth against how long the machine will keep earning.
A £38,000 van with a balloon
A delivery firm is buying a van at £38,000 excluding VAT. The deposit is £3,800, which leaves £34,200 to finance over four years at 8.5%.
With no balloon the payment is about £843 a month and the finance charge about £6,300. Agree a balloon of £7,600 (20% of the price) and the payment falls to about £709, saving £133 a month. Finance charges rise to about £7,500, and the £7,600 is due at the end. That’s the catch. Before agreeing it, the firm needs to know where that money will come from: cash, a refinance, or selling the van and clearing the balance.
£60,000 of IT equipment, lease against hire purchase
A professional services firm needs £60,000 of IT. No deposit, three years, 12%.
Hire purchase comes to about £1,993 a month, with about £11,700 in finance charges. A finance lease with a final payment of £6,000 brings the rental down to about £1,854, which is £139 less. Add that final payment and the lease costs about £72,700 overall against £71,700 for hire purchase. Technology ages fast, though, and plenty of firms would happily pay the extra £1,000 or so for the lower rental and the option to return or upgrade.
What £2,500 a month buys
Say a contractor can comfortably pay £2,500 a month. Over five years at 9.5% with a 10% deposit, that supports about £119,000 of borrowing, and an asset priced at around £132,300 once the deposit is added. The affordability tab does this sum for any budget, term and rate.
These are illustrations, not quotes. Lenders set their own rates and yours will depend on the case.
Typical asset finance rates, as at October 2026
Rates move around with the asset, the age of the business and the credit record behind it, so treat these as ballparks. Hire purchase generally runs from 6% to 18% a year. Finance leases run from 5% to 16%, and they’re often quoted as a monthly rental rather than a rate.
By asset: commercial vehicles with a strong trading record price at roughly 6% to 10%, while older vehicles or a short trading history push that to 10% to 18%. New plant and machinery that’s in demand sits around 7% to 12%. Specialist, older or niche equipment can reach 12% to 22%. IT and technology on lease runs about 8% to 18%, because it loses value so quickly, and agricultural equipment about 6% to 14%. Each starting rate in the calculator sits inside the range for its asset type.
Terms usually run from one to seven years. Most deals ask for a deposit of 10% to 25%, though plenty need none. Facilities start at a few thousand pounds and go well into the millions.
What lenders look at before they fund an asset
Lenders ask the same questions again and again, and the calculator can’t answer them for you.
Start with age. A business that’s been trading for two years or more gets the sharpest rates, and around twelve months of accounts is where most lenders begin to engage. Then there’s the asset itself. A new van or a popular machine can be resold if the worst happens, so lenders relax. Something built for one narrow process is hard to value, and the terms get tighter.
Your figures matter too. Lenders look at turnover, profit and existing borrowing to see whether the payment fits comfortably. Company and director credit records both count, and a poor one means fewer lenders and a higher rate, although specialist lenders do exist for those cases. A bigger deposit shrinks the lender’s risk and usually the price. And nearly all of them pay the supplier direct, so expect to supply a quote or invoice.
Where the calculator stops and a broker starts
A calculator prices one deal. It can’t tell you which lenders will take your asset, how they’ll value it, or how to put the application together so it sails through. We can.
Commercial Finance Network works across the full asset finance panel. Before you apply anywhere we’ll tell you what’s realistically on offer for your asset and your business, and what it will cost. Our asset finance page covers each product in detail, and our piece on equipment financing looks at how firms use it to grow without draining cash. If it’s working capital you’re after rather than an asset, have a look at invoice finance and business loans.
Frequently Asked Questions
What's the difference between hire purchase and a finance lease?
Ownership, mainly.
Hire purchase leaves you owning the asset after the last payment and the option-to-purchase fee, and you claim the capital allowances. With a lease the lender stays the owner, you pay rentals that are generally deductible, and at the end you can keep renting, sell on the lender’s behalf or hand the asset back. VAT is charged on the full price at the start with hire purchase and on each rental with a lease.
Will I get the rate shown in the calculator?
Probably not exactly.
It’s a typical starting point for the asset type you chose. Your own rate comes from your trading history, credit record, the asset, the deposit and the term, so it could be higher or lower. Got a quote? Type it in and the figures will reflect your actual deal.
Can I get asset finance without a deposit?
Often, yes.
Established businesses buying mainstream equipment can frequently borrow the whole price. Even so, putting 10% to 25% down tends to bring the rate down and make approval easier, and it lowers the payment. Try different amounts in the deposit field.
What's a balloon payment?
A lump sum you agree to leave until the end.
Because you’re not paying it off month by month, the instalments are smaller. The lump sum falls due when the agreement finishes, and you’d clear it from cash, refinance it or sell the asset and settle up. Since you owe that money for longer, total interest rises, as the calculator shows.
Can a new business get asset finance?
Yes, with fewer options.
Most lenders want about twelve months of trading, so a start-up has a shorter list to try and usually pays more. A bigger deposit, a clean personal credit record and a solid explanation of how the asset will earn money all help.
Is asset finance tax deductible?
Depends which agreement you choose.
On hire purchase the business normally claims capital allowances and treats the interest as a finance cost. On a finance lease the rentals are generally deductible. The better route turns on your profits and the asset, so check with your accountant.
Final Thoughts
A calculator shows the numbers. The asset, the business behind it and the lender decide whether you can get them, and those three are best looked at together.
Commercial Finance Network is a whole-of-market commercial finance broker working with businesses and property investors across the UK and internationally. We are directly authorised and regulated by the Financial Conduct Authority.
The asset financed is usually the security, and it can be repossessed if you do not keep up repayments. Where a personal guarantee is given, personal assets may be at risk. Most asset finance for limited companies is not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Commercial Loan Calculator – Monthly payments and total cost on a commercial loan over a chosen term.
- Bridging Loan Calculator – Monthly interest, fees and total cost on short-term bridging finance.
- Working Capital Finance – Short-term funding to cover gaps in cash flow.
- Sale and Leaseback – Releasing cash from assets the business already owns.
- Commercial Mortgage Calculator – Repayments on a commercial mortgage over a chosen term.
