The Asset Finance Landscape: Finding the right fit for your business
Matt Wheeler · Posted on: May 28th 2025 · read
Asset Finance remains one of the most effective tools for UK businesses looking to invest in growth, manage cash flow, or access the equipment they need to operate efficiently.
From Hire Purchase, Finance Lease, Operating Lease, Refinance and Contract Hire, these are just some of the available Asset Finance products available to UK businesses, but what is the best fit for your business?
The Market
The Asset Finance market within the UK currently sits at around £40bn per annum, and according to the Finance & Leasing Association (FLA), continues to provide support for all business’s, funding a third of UK investment in vehicles, machinery and equipment in 2024.
With Commercial Vehicles, Cars, Plant & Machinery presenting the largest asset types being funded, these are often funded through Leasing or Hire Purchase (HP) finance products, as these present greater options and flexibility for owning, selling and replacing the asset at the end of finance term, whilst also often allowing clients access to equipment with lower upfront costs.
The Lending Landscape
Much has changed within the Asset Finance Lending space over my 20 years in the industry, and despite some well known banks exiting the market, there is still an abundance of lenders. Each will have their own lending appetite and niches on what they will and won’t lend against, and ultimately some will charge higher rates depending on the deal and structure. That is where we can assist at MHA, ensuring the right Asset Finance Deal is presented to the right lender and for the right type of asset finance solution.
Structure and Rates
There is no one size fits all approach when deciding how to fund your business capex, as lenders can accommodate VAT deferments, ballons, seasonal payments, zero deposits, monthly or quarterly repayments, fixed and variable rates, as you can see there is much to consider.
Whilst rate is a key factor in deciding whether to finance or not, it should not be the sole reason. One client I previously worked with, would happily share they are purchasing brand new equipment and financing over 2 years at 0%. Whilst this was true, it was also proving to be a real drain on cash within the business, and they were paying substantial fees for heavy utilisation of their overdraft.
By spreading the cost of the purchase over a period more in line with the equipment’s primary economic life, actually proved more beneficial and cost effective for the client.
Refinance Options
The ministerial statement also confirmed the January 2025 announcement that plans to require employers to include details of employees’ working hours as part of PAYE Real Time Information (RTI) returns have been shelved in recognition of the potential administrative burden that the change would have imposed on employers. The change had already been pushed back from April 2025 to April 2026 following the General Election. However, it has now been confirmed that the required legislative changes will no longer be progressed through Parliament.
Why MHA
Whilst Asset Finance is often described as a simple funding solution, it can be quite a challenging process, as each lender is different, this is where our expertise at MHA can assist and help with that journey.
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