How asset finance works
Asset finance spreads the cost of equipment over time instead of paying upfront. With hire purchase or an equipment loan, you repay the price minus your deposit in monthly instalments and own the asset at the end. This calculator covers those.
Leasing works differently: you pay to use the asset and usually hand it back or pay a final amount at the end. Lease payments aren't covered here.
Worked example
A £60,000 machine with a £6,000 deposit means financing £54,000. At 9% over 48 months, the monthly payment is £1,343.79, £64,502.03 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Tax and VAT
The way tax relief and VAT work depends on the type of agreement, so check how your chosen option is treated with your accountant.
Inputs for the asset finance calculator
Asset price
The price of the equipment, machinery or vehicle.
Deposit
Any upfront payment.
Interest rate (per year)
The annual interest rate on your agreement. The rate shown is only an example, so enter the rate from your quote.
Term
The length of the agreement in months.
CALCULATOR QUESTIONS
Asset finance calculator questions
What is asset finance?
A way to pay for business equipment, machinery or vehicles over time, usually secured on the asset itself.
Does this work for leases?
No. It covers hire purchase and equipment loans, which are repaid in full. Leases have different payment structures.
Who owns the asset?
With hire purchase, you own it after the final payment. With a loan, you own it from the start.
Does this include VAT or fees?
No. Add any fees from your quote and check the VAT treatment with your accountant.