Finance Lease

A Finance Lease is a flexible way for your business to access the equipment, vehicles, IT, or machinery you need — without paying the full cost upfront. You make fixed monthly payments over an agreed term, while enjoying full use of the asset from day one.

What is a Finance Lease (UK)?
A Finance Lease is a type of business asset finance where a finance provider buys the equipment and leases it to your limited company for fixed monthly payments. You use the asset from day one, while legal ownership stays with the finance provider during the agreement.

How does a Finance Lease work?
Your business chooses the equipment, the lender purchases it, and you pay monthly rentals over an agreed term (commonly 12–60 months). Rentals are usually fixed, helping with predictable budgeting.

What can I fund with a Finance Lease?
Finance Leases are commonly used for equipment and technology such as IT hardware, telecoms, specialist business equipment, and eligible software-related project costs. Hard assets like vehicles and some plant/machinery are often financed with Hire Purchase, depending on the asset and objectives.

What’s the difference between a Finance Lease and Hire Purchase?
With a Finance Lease, legal ownership remains with the finance provider during the term. Hire Purchase is typically used when the goal is to own the asset at the end of the agreement.

Do I own the asset under a Finance Lease?
No — not for the duration of the agreement. Your business leases the asset and has full use of it, but legal title remains with the finance provider.  

What happens at the end of a Finance Lease?
You typically have the option to continue payments at a reduced rate, return the equipment, or purchase title for a one-off nominal payment (often around one additional month’s rental), depending on the agreement.

Is a deposit required for a Finance Lease?
In most cases, no. Many Finance Lease agreements can be arranged with little or no upfront payment, subject to approval.

Are Finance Lease payments fixed?
Yes, Finance Lease rentals are usually fixed for the term, which helps businesses plan cashflow and manage monthly outgoings.

Can a Finance Lease include installation, delivery, or project costs?
Often, yes. Depending on the lender and asset type, associated costs such as delivery, installation, configuration, and professional services may be included within the total amount financed.

Is a Finance Lease regulated by the FCA in the UK?
Finance Leases for limited companies used for business purposes are generally unregulated, which makes them a common option for B2B equipment funding.

Can I settle a Finance Lease early?
Yes, early settlement is usually possible. The settlement figure is typically based on the remaining rentals and the agreement terms, and early settlement fees may apply.

Who is responsible for maintenance and insurance on a Finance Lease?
Your business is normally responsible for maintenance, servicing, and insurance throughout the lease term, as you’re the day-to-day user of the equipment.

Can I upgrade or add equipment during a Finance Lease?
Sometimes. Depending on the lender and your business profile, you may be able to add further equipment or restructure the agreement. This is assessed on a case-by-case basis.

Does a Finance Lease appear on the balance sheet?
In most cases, yes. Finance Leases are typically treated as on-balance-sheet liabilities under UK accounting standards. Your accountant can confirm the correct treatment for your business.

Is a Finance Lease suitable for funding software and IT projects?
Yes. Finance Leases are commonly used for IT and technology solutions, and may include eligible software-related project costs such as configuration, implementation, and professional services, subject to lender criteria.