Guide
What affects the cost of asset finance?
Reviewed by Luca Scalzo, Director, WFYA Limited · Last reviewed
There is no single rate for business asset finance: each lender prices each application on its own. The cost mainly depends on your business's credit profile and trading history, the asset and its resale value, the deposit, the length of the term and the lender's own funding costs. Two businesses buying the same van can be offered very different terms.
That is why we do not publish rates on this website. We look at your circumstances first, then tell you what lenders on our panel offer.
What do lenders look at?
| Factor | Why it matters to the lender |
|---|---|
| Credit profile of the business | A strong payment record usually means lower risk |
| Directors' credit history | Many lenders also check directors, especially in smaller or younger companies |
| Trading history and accounts | Longer, profitable trading shows the business can repay |
| The asset | Assets that hold their value and are easy to resell are better security |
| New or used, age and condition | Older or specialist assets carry more risk for the lender |
| Deposit | A bigger deposit reduces the amount borrowed and the lender's risk |
| Term | A longer term lowers monthly payments but usually increases the total paid |
| Balloon payment | Lowers monthly payments, but you still owe it at the end |
| Amount | Very small and very large amounts can be priced differently |
| Personal guarantee | Can widen the choice of lenders for younger businesses |
| Market interest rates | Lenders' own funding costs move with wider interest rates, including the Bank of England base rate |
What fees can there be?
Besides interest, agreements can include a documentation fee at the start and an option to purchase fee at the end of hire purchase. We do not charge you a fee for arranging finance. As a credit broker we may receive commission from the lender, which can vary by lender and product; we tell you about it before you proceed. Ask for every fee in writing before you sign.
How should you compare quotes?
- Compare the total amount payable, not only the monthly payment.
- Check the deposit, term, balloon and every fee on each quote.
- Business finance for limited companies is often quoted as an interest rate or a flat rate rather than an APR. Ask how the rate is calculated so you compare like with like.
- Look at what happens at the end: ownership, return conditions, early settlement terms.
- Consider the after tax cost with your accountant, because hire purchase and leasing are taxed differently.
How can you improve the terms you are offered?
- Keep your business and personal credit files up to date and accurate.
- Have recent accounts and bank statements ready.
- Put in a larger deposit if your cash flow allows.
- Choose an asset with a good resale value.
- Explain any past issues upfront: lenders prefer context to surprises.
Sources
Checked on 31 October 2026.
Frequently asked questions
What APR should I expect on business asset finance?
There is no typical figure we can give you, because the cost depends on your business, the asset, the deposit and the term, and each lender prices differently. Business agreements with limited companies are often quoted as an interest rate rather than an APR. Once we know your details we can tell you what lenders on our panel offer.
Why was I offered a higher rate than advertised elsewhere?
Advertised rates usually apply only to some applicants. Your offer reflects the lender's assessment of your business, the asset and the deal structure.
Does a longer term make finance cheaper?
A longer term lowers the monthly payment but usually increases the total amount payable, because interest is charged for longer.
Does a broker make finance more expensive?
Not necessarily. A broker may receive commission from the lender, which must be disclosed to you. Compare the total amount payable on each option. See broker vs your bank.
Does the Bank of England base rate affect asset finance?
Indirectly. Lenders' own funding costs move with wider interest rates, which can affect the rates they offer on new agreements. Most asset finance agreements have fixed payments once signed.
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