Business Asset Finance

This depends on a number of factors: Are you VAT registered? Is your business a limited company? Is the equipment new, and does it qualify for the main rate of relief? We’re happy to talk through your circumstances — and we’d always recommend checking with your accountant too.

How long your business has been trading is another factor that affects the finance options and rates available to you. Here’s what that means in practice.

What counts as an “established” business?

As a general guide, most finance providers consider a business “established” once it’s been trading for three years or more. But it’s rarely quite that black and white — lenders also weigh up things like your trading history and filed accounts, your business and (for newer or smaller businesses) personal credit history, your industry and turnover, and whether your business has recently changed structure, such as moving from sole trader to limited company. Two businesses that have both been trading for two years can still be treated quite differently depending on these other factors, so it’s always worth talking to us about your specific circumstances rather than assuming either way.

If you’re a new start business

You can still access equipment finance as a new or recently started business, but it’s worth knowing what to expect:

●        Typically higher interest rates, reflecting the extra risk to the lender of a shorter trading history

●        A deposit or advance payment may be requested more often than for an established business

●        Some lenders may ask a director for a personal guarantee

●        Fewer lenders may be willing to offer terms, so the range of options may be narrower

●        Maximum loan amounts or terms may be more limited in some cases

Once your business is established

As your trading history and track record build up, you’ll typically find:

●        More competitive interest rates

●        A wider choice of lenders and finance products to pick from

●        Potentially longer terms and higher borrowing limits

●        Less reliance on personal guarantees

Capital allowances let businesses write off the cost of qualifying equipment against taxable profits. Rather than deducting depreciation (which isn’t allowable for tax), you deduct the appropriate capital allowance instead. The relief available depends on your business structure, the type of asset, and how you finance it.

If you finance equipment on a lease rental agreement, the equipment remains owned by the finance provider, so capital allowances don’t apply to you directly. Instead, your monthly rental payments are simply deductible against your profits as a business expense, spread evenly over the term.

Tax rules change, and how they apply depends on your individual circumstances. This is a general guide, correct as of August 2026 — please confirm your position with your accountant before making a decision.

The figures below are a worked example only, to show how the numbers can work out — they’re not a quote. Get in touch for a bespoke illustration based on your chosen equipment, deposit and term.

Example: equipment costing £18,995 plus VAT

Examples of the tax relief available for hire purchase vs. lease rental over a 5-year term are shown below (figures rounded, based on the main rate of corporation tax at 25%; if your company pays the small profits rate of 19%, relief will be proportionately lower).

If you’re a limited company buying new equipment, you’ll typically qualify for full expensing — hire purchase may then be the best option to accelerate your tax relief, though you’ll need to pay all the VAT up front with your first payment.

If you’re a sole trader or partnership, don’t wish to pay VAT up front, or aren’t purchasing a main-rate asset, lease rental could be a good option. VAT is due on each monthly payment.

Either way, the total tax relief by the end of the agreement is the same — the difference is when you receive it. Hire purchase brings more relief forward into year one, improving cash flow sooner; lease rental spreads it evenly across the term. Whichever you choose, you’ll benefit from the improved cash flow that asset finance offers, freeing up cash to invest elsewhere in your business.

Arranging your finance doesn’t cost you anything extra through us. A documentation fee is usually payable to the finance provider with your first payment (typically £150–£250, though this varies by lender). At the end of the term, there may be an option-to-purchase fee or final payment to retain the equipment. All fees will be clearly set out in your finance agreement before you commit.

Stocks Sewing Machines Ltd is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 663301) and acts as a credit broker, not a lender. We work with a panel of finance providers to find the right funding solution for your business, and may receive a commission from the provider for introducing you — this comes at no extra cost to you.

Call 0113 242 9378 — Monday to Thursday, 08:30 am to 5:00 pm; Friday, 08:30 am to 4:00 pm.