Lloyds Bank asset finance: options, costs and alternatives

Lloyds Bank offers asset finance in three main forms, and the right one depends on a single question: do you want to own the asset at the end, or just use it?

Hire purchase ends with you owning it. A finance lease lets you use it and then extend or sell it. Vehicle contract hire means you hand it back. There's also a route to release cash from equipment you've already bought.

One detail worth knowing straight away, because it isn't true of every bank: you don't need to bank with Lloyds to apply. What you do need is turnover above £100,000 a year and at least 13 months of trading.

All Lloyds Bank product details below are taken from its asset finance pages

• Hire purchase: You pay a deposit, Lloyds buys the asset and hires it to you across an agreed term, and once you've settled the payments you pay a small option-to-purchase fee and the asset transfers to you. Lloyds sets the deposit at around 10% and requires that the asset is less than seven years old.

• A finance lease funds a higher share of the price because ownership never passes to you. At the end you can extend the lease or sell the asset.

• Vehicle contract hire is a type of vehicle finance is for new assets only, needs no deposit, and ends with you returning the vehicle. This is provided through Lex Autolease, which is part of the same banking group.

You can settle a hire purchase agreement early, though early repayment charges may apply. 

Releasing cash from assets you already own

Sale and Hire Purchase Back lets you sell recently bought equipment to Lloyds at its full non-depreciated value and then hire it back. You keep using the asset exactly as before, and you get cash back into the business. However, it is important to speak with your relationship manager for exact details. 

The window is tight, though. The equipment must have been bought within the last six months in England and Wales, or three months under Scottish law, and paid for in full. 

If you've recently used your cash reserves or your overdraft on a big equipment purchase and regretted it, this can help you recoup some costs.

How much does Lloyds asset finance cost

Pricing for asset finance depends on the asset you want to buy or lease, so the cost depends on what you're funding, the term and your circumstances. Normally, you get an indicative quote first, then a conversation, then a decision.

Lloyds also offers Green Asset Finance, with discounted interest on sustainable assets such as electric vehicles, energy-efficient equipment and renewables.

Fees and pricing structures vary between providers and change over time, so compare the total amount repayable over the term you actually want rather than any headline figure, and check current terms directly.

Who can apply

To apply you must:

• Be a new or existing Lloyds Bank customer

• Have turnover of more than £100,000 a year

• Have been trading for at least 13 months

• Be UK-based

• Be using the asset for your business

The first point is a common one, since many banks will only finance assets for their own account holders. The £100,000 turnover floor is higher than many non-bank lenders set, so a smaller business may need to look elsewhere.

Things Lloyds asks you to keep in mind

Extra conditions beyond costs that can affect your decision include:

• Assets and suppliers go through a vetting process

• You're responsible for maintenance, repairs and keeping the asset insured

• Any agreement is subject to an affordability assessment and a full credit reference agency check

• Assets may be repossessed if you don't keep up your repayments

Who actually provides asset finance

Asset finance facilities are provided by Lloyds Bank plc, registered in England and Wales. Lloyds UDT Leasing Limited also sits behind some leasing agreements, and vehicle contract hire comes through Lex Autolease Limited.

The same asset finance proposition also appears under Bank of Scotland, because both banks sit within Lloyds Banking Group. 

Going direct versus going through a marketplace

There are multiple options for finding asset finance for your business.

• Going direct suits you if you meet the bank's criteria comfortably and value dealing with one institution. 

• A marketplace can suit you if your turnover sits below a bank's floor, your business is younger than 13 months, your asset is unusual, or your sector has particular needs.

Different lenders have different appetites, and one decline from one bank isn't a verdict on your business.

How Funding Circle can help

Funding Circle asset finance works through a panel of trusted asset finance providers rather than a single lender. You apply once, and an Account Manager reviews the deals available across the panel with you.

• Asset finance from £10,000 up to £5 million

• Terms of 1 to 7 years

• A dedicated Account Manager you can call or email directly

• One online application, taking around 7 minutes, with decisions usually within 1 to 2 days

• No impact on your credit score to apply if you're a limited company or LLP. Hard search completed once an offer has been accepted. 

Because the lenders on the panel have different processes, the terms, rates and end-of-agreement options differ between the deals available. Your Account Manager will talk you through the options, and any agreement is between you and the provider funding it, so it's worth comparing the total cost and the end-of-agreement terms across everything you're offered.

Our marketplace can fund hire purchase, finance lease and asset refinance across vehicles, plant and machinery, manufacturing and construction equipment, agricultural and forestry kit, and green energy equipment. You can also borrow against assets you already own outright.

To apply, your business needs to:

• Be based in the UK

• Be a limited company or LLP

• Have at least 1 year of trading history

• Have annual turnover of at least £50,000

If you want to fund stock or general working capital rather than a specific asset, you could also opt for a business loan or FlexiPay for a flexible line of credit.

For more on how the different structures work, see our guide to asset finance and our introduction to business vehicle finance.

Frequently asked questions

Do I need a Lloyds Bank account to get asset finance?

No. Lloyds states you can apply as a new or existing customer, so you don't need to already bank with them.

What are the eligibility requirements?

Turnover above £100,000 a year, at least 13 months trading, UK-based, and the asset must be for business use. For hire purchase, Lloyds also requires the asset to be less than seven years old.

How much does Lloyds asset finance cost?

Lloyds doesn't publish rates. It says pricing is tailored to the asset you want to buy or lease, so you'll need a quote. There's normally a £200 arrangement fee, currently waived on qualifying online applications.

What's the difference between asset finance and a business loan?

Asset finance is used solely to buy or lease a specific agreed asset, and the asset's value acts as the security. A business loan is a lump sum you can use more broadly. Asset finance also gives you choices at the end of the term, including owning, returning, selling or extending.

Can I refinance equipment I've already bought?

Yes, through Sale and Hire Purchase Back, provided you paid in full and bought it within the last six months in England and Wales, or three months in Scotland.

28/09/26 – While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.