How much deposit do I need for asset finance?
Between nothing and 20 percent of the price. An established company with a clean file buying a mainstream asset from a dealer can often put in nothing; a newer business, or one buying older or unusual kit, should plan on 10 to 20 percent. On hire purchase the VAT on the whole price is usually paid with the deposit, so the cash on day one is the deposit plus the VAT, which on a £60,000 machine is a bigger number than the deposit alone.
That VAT is the part most people are not expecting. 25 of the 38 asset finance lenders on our panel offer a VAT deferral, which pushes the VAT payment back a quarter so you reclaim it before you pay it. We arrange finance for UK limited companies, LLPs, sole traders and partnerships through the lenders whose deposit and VAT rules fit the asset and the business, and the table below is what to expect from them.
Deposit by type of case
The lender sets the deposit to cover what it would lose if it had to take the asset back and sell it in a hurry. Anything that makes the asset easier to sell, or the borrower easier to trust, brings the number down.
| Case | Typical deposit | Why |
|---|---|---|
| Established company, mainstream asset from a dealer | Nil to 10% | The asset resells easily and the accounts carry the case |
| Established company, specialist or bespoke kit | 10% to 20% | A narrower resale market, so the lender keeps more equity in the deal |
| Business trading under two years | 10% to 20% | The lender is underwriting the director and the asset, not the accounts |
| Used or older machinery | 10% to 20%, sometimes more | Only 15 lenders fund older kit, and they want a valuation and a margin |
| Private seller or auction purchase | 15% to 20% | 10 lenders fund private sales; proof of ownership and an inspection are usual |
| Hire purchase, any case | Add the VAT on the full price, unless deferred | VAT is charged up front on hire purchase and reclaimed on your next return |
| Lease, any case | Often one to three rentals in advance instead of a deposit | VAT is charged on each rental rather than up front |
Hire purchase and the VAT
On hire purchase you are buying the asset, so HMRC treats the VAT as due at the start on the full price. A £60,000 machine carries £12,000 of VAT, and with a 10 percent deposit the cash on day one is £18,000 before the first monthly payment. You reclaim the £12,000 on your next VAT return, which can be up to three months away.
A VAT deferral bridges that gap: the lender funds the VAT for a quarter and you repay it when the reclaim lands. 25 of our 38 asset finance lenders offer one. On a lease the question does not arise, because the funder owns the asset and charges VAT on each rental. That is illustrative arithmetic, not an offer.
When nil deposit is real
It exists, for the cases lenders like most: a company with two years of filed accounts and a clean file, buying a new or nearly new mainstream asset such as a van, a car, a telehandler or a standard machine, from a dealer, with a director willing to give a guarantee. Take any one of those away and the deposit comes back. A start-up buying a van will be asked for one even with a strong director, because the deposit is the lender's only cushion when there are no accounts.
What the panel says
Counts are distinct lenders on our panel with a live product for each feature, checked September 2026. They describe the panel, not an offer to you, and composition changes over time.
- 38 asset finance lenders in total.
- 25 offer a VAT deferral; 10 fund private sales; 15 fund older machinery.
- 32 fund vans, 33 construction plant, 31 factory plant, 17 luxury cars.
- 5 unsecured lenders consider a start-up, which is why a new business's first funded asset is usually a van on hire purchase rather than a loan.
Where the deposit can come from
Cash in the business is simplest. A part-exchange of the old asset is common with dealers and counts as deposit. A director's loan into the company works if it is documented. What lenders will not accept is a deposit that is itself borrowed and undisclosed; tell them where it comes from and most sources are fine. This page is general information, not advice.
Frequently asked questions
Can I get asset finance with no deposit?
Yes, for an established company with clean accounts buying a mainstream asset from a dealer. On hire purchase you will still pay the VAT up front unless the lender defers it, so "no deposit" rarely means no cash on day one.
Is the deposit bigger for a used asset?
Usually, and the list of lenders is shorter. 15 lenders on our panel fund older machinery, and they typically want 10 to 20 percent plus a valuation, because a used asset is harder to price and to sell.
Does a bigger deposit get a lower rate?
Sometimes, at the margins. What it does more reliably is widen the list of lenders willing to look at the case, which is what actually moves the price. A case that two lenders will consider is priced by two lenders.
Can the VAT be included in the finance?
Through a VAT deferral with the 25 lenders that offer one, the VAT is funded for a quarter until you reclaim it. Some lenders will finance the VAT over the full term instead, which costs interest on money you get back from HMRC within months, so the deferral is usually the better structure.
More funding questions answered
- What documents do I need for a business loan?What lenders ask for by product, why some skip the accounts, and what to have ready on day one.
- Can I repay a merchant cash advance early?Usually yes, but the fee is fixed at signing, so it rarely cuts the total.
- What happens if I default on a merchant cash advance?What default means, how a personal guarantee works, and where to get free debt help.
- What counts as bad credit for a business?CCJs, defaults, late payments and thin files, and how long each stays on record.
- Invoice finance with bad creditWhy lenders look at your customers' credit rather than yours.
- Do I need a business bank account for funding?What iwoca, Funding Circle and YouLend ask for, and why Open Banking comes up.
Find out what deposit your purchase needs
The asset, the seller, the price and how long you have traded. We say which lenders fit and what each would want on day one, VAT included.
Sources
Checked September 2026. Deposits are set case by case by the lender; the ranges here are what we see across the panel, not a promise about any one lender.
Important information
CapExpand Ltd (FRN 1060885) is an Appointed Representative of White Rose Finance Group Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630772). We are a credit broker, not a lender, and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request. If a deal completes the lender pays us a commission, at no cost to you; different lenders pay different amounts under different models, and we will tell you the amount for your deal on request. All lending is subject to status, valuation where applicable and the lender's own checks.
Registered office: Pure Offices, Lake View Drive, Annesley, Nottingham, NG15 0DT. Company No. 14433858.
CapExpand Ltd (FRN 1060885) is an Appointed Representative of White Rose Finance Group Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630772). We are a credit broker, not a lender. We do not provide financial advice.