Hire purchase
Business hire purchase: spread the cost and own the asset
Reviewed by Luca Scalzo, Director, WFYA Limited · Last reviewed
Business hire purchase (HP) is a way to buy an asset, such as a van, a truck or a machine, by paying a deposit and then fixed monthly instalments over an agreed term. The lender owns the asset until the last payment; after that, ownership passes to your business.
We Finance Your Asset is a credit broker, not a lender. We arrange hire purchase for UK businesses by introducing applications to lenders on our panel.
How does business hire purchase work?
- 01
Choose the asset
Pick the vehicle, machine or equipment and get a quote from the supplier.
- 02
Agree the terms
The lender sets the deposit, term and monthly instalments based on the asset and your business. You can sometimes add a balloon payment at the end to lower the instalments.
- 03
Pay and own
The lender pays the supplier, you use the asset straight away, and after the final payment (and any option to purchase fee) the asset belongs to your business.
Who can apply for business hire purchase?
- Businesses that want to own the asset and use it for most of its working life.
- Companies that want predictable monthly costs instead of a large one off payment.
- Limited companies and LLPs.
What can a business buy on hire purchase?
- Cars, vans and fleet vehicles.
- HGVs and trailers.
- Construction equipment, heavy plant and CNC machines.
- IT equipment and other business equipment.
How does hire purchase compare with leasing?
| Hire purchase | Finance lease | |
|---|---|---|
| Who owns the asset | The lender until the final payment, then your business | The lender throughout |
| End of the agreement | You own the asset | You return it, extend the rental or sell it for the lender and share the proceeds, depending on the agreement |
| Tax (general rule) | Business can usually claim capital allowances; interest is a business cost | Rentals are usually a business expense |
| VAT | Usually paid up front on the purchase price | Usually charged on each rental |
Tax and VAT depend on the asset and your business: always check with your accountant. More detail in hire purchase vs finance lease for a company van.
What documents do you need to apply for business hire purchase?
Our application form asks for the information lenders need first, so it helps to have it ready:
- Your company name and Companies House number.
- The director's contact details, date of birth and home address history.
- Details of the asset: what it is, its price, the supplier and, for vehicles, the registration and mileage if known.
- The deposit you plan to put in and the term you would like.
- Your last three months of business bank statements, which you can upload with the form.
Lenders may then ask for more, such as recent accounts, proof of identity or the supplier's invoice, depending on the amount and your business.
How long does business hire purchase take?
It depends on the asset, the lender and how quickly the documents arrive. The lender then makes its own decision; straightforward applications with complete documents move fastest, while larger amounts, used or specialist assets and newer businesses can take longer.
What deposit and term should you expect for business hire purchase?
Most agreements involve some upfront payment, and the amount depends on the lender, the asset and your business. Newer businesses, older or specialist assets and larger amounts may need a bigger deposit. Terms are usually set by the expected working life of the asset. We will tell you what the lenders on our panel ask for once we know your details. We do not quote interest rates on this website because the cost depends on your circumstances: see what affects the cost of asset finance.
Sources
Checked on 31 October 2026.
Frequently asked questions
What is business hire purchase?
It is an agreement where your business pays for an asset in instalments and owns it after the final payment. Until then, the lender owns the asset.
Is hire purchase a loan?
Not exactly. With a loan you own the asset from day one and the lender lends you money. With hire purchase the lender buys the asset and you hire it until the last payment, when ownership passes to you. The asset itself is the lender's security.
Can I pay off a business hire purchase early?
Usually yes. The lender will give you a settlement figure. Whether there is a saving or a charge depends on the agreement, so check the terms before you sign.
What is a balloon payment on hire purchase?
A larger final payment that lowers your monthly instalments. You need to plan how to pay it at the end, for example from cash, by refinancing or by selling the asset.
Can I get hire purchase on used assets?
Yes. Used vehicles and machines can be bought on hire purchase, within each lender's age and condition limits.
Talk to us about your asset
Tell us what you want to finance. Our team reviews every application and comes back to you.
Start your application