Do you need a deposit for asset finance? Typical deposits: 0–20%

Quick answer: many lenders accept little or no deposit, but typical deposit ranges are usually between 0–20% depending on the asset type, lender appetite, the business’ financial position and the finance product chosen.

UK Business Loans is not a lender and does not give regulated financial advice. We introduce UK businesses to brokers and lenders. Our service is free and no obligation. Actual deposit requirements are set by individual lenders and brokers.

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Table of contents

• Summary (short answer)
• How deposit requirements typically work
• Typical deposit ranges by asset & scenario
• What affects the deposit lenders ask
• No-deposit or low-deposit options
• Practical steps to reduce or avoid a deposit
• Documents, timeline & what to expect
• Costs beyond the deposit
• Real examples
• Frequently asked questions
• Ready to check your deposit?
• Legal & compliance

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Summary — short answer

Short answer: a deposit is often required but many lenders offer 0–20% deposit options. New equipment and fleet deals commonly qualify for 0% or low-deposit offers, while higher-risk assets, older equipment or weaker credit profiles can require 10–20% (sometimes more). Exact terms vary by lender, product and asset — get matched to lenders/brokers for precise quotes.

Need an immediate check? Get a Free Eligibility Check. We’ll only share your details with selected lenders/brokers for your enquiry.

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How deposit requirements typically work in asset finance

Asset finance covers several product types: hire purchase (HP), finance lease, operating lease/contract hire and conditional sale. Deposits reduce the lender’s exposure and can affect ownership, payment amounts and tax treatment.

• Hire Purchase (HP) — borrower pays deposit (optional) then monthly payments; borrower typically owns the asset at term end.
• Finance Lease — lender technically owns the asset; deposits reduce monthly payments and may be required for used or high-risk assets.
• Operating Lease / Contract Hire — often structured with no deposit; rental payments cover usage and the lender/broker retains residual risk.
• Vendor / Manufacturer finance — deposit terms depend on promotions; manufacturers sometimes offer 0% deposit or subsidised deals on new kit.

Below is a simple accessible table summarising typical deposit bands by product type.

Typical deposit ranges by product type

Product	Typical deposit range	Why
Hire Purchase	0–20%	Reduces lender exposure; ownership transfers at end
Finance Lease / Conditional sale	0–15%	Lender retains ownership; deposits vary by asset age
Operating Lease / Contract Hire	Often 0%	Residual value assumed by lessor; common for fleets and short-term use
Vendor / Manufacturer finance	0–10% (promotions possible)	Marketing promotions or manufacturer support can reduce deposit

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Typical deposit ranges by asset & scenario

Vehicles & fleets

New vans and cars: 0–10% is common for new fleet deals, especially with dealer or manufacturer finance. Used vehicles: lenders often require 5–20% depending on mileage, age and residual value.

Construction & heavy plant

New machinery with warranty or dealer support: 0–10% possible. Used plant / specialist equipment: 10–20% or higher because resale markets are smaller and risk is greater.

IT and office equipment

Leasing is common and many offers come with 0% deposit, particularly for new technology and bundled vendor deals. Short term operating leases are a good route to avoid upfront cash.

Medical & specialist equipment

Deposits typically range 5–20% depending on asset age, transferability and aftermarket demand — expensive, high-tech kit can attract higher deposits if resale is uncertain.

Mini-scenarios:

• New van for a trade business — possible 0% via contract hire or finance lease if accounts and credit strong.
• Used excavator — a specialist lender may ask for 15% deposit due to lower resale value and higher risk.
• IT refresh for office — vendor lease with 0% deposit and predictable monthly rentals is common.

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What affects the deposit lenders ask

Deposit levels are not arbitrary. Lenders and brokers price deposit requirements according to risk and commercial factors:

• Asset age & residual value: newer assets with good resale value need smaller deposits.
• New vs used: used items typically carry higher deposits.
• Business credit profile: stronger credit and trading history can secure lower deposits.
• Industry/sector risk: some sectors (e.g. haulage, construction) are seen as higher risk by certain lenders.
• Term length & structure: longer terms or balloon/residual structures change deposit needs.
• Lender appetite: mainstream bank vs specialist lender — each has different criteria and deposit bands.

How brokers help: brokers can shop multiple lenders and specialist panels to find deals with lower deposits — that’s where a matching service can save you time and cash.

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No-deposit or low-deposit options

Zero or very low deposit deals exist and are often delivered through:

• Manufacturer/vendor finance promotions (e.g. seasonal deals).
• Operating leases / contract hire where the lessor retains residual risk.
• Hire purchase with 0% deposit offers (costs may be built into monthly payments).
• Balloon/residual payment structures that reduce up-front cash but leave a final payment.

Pros & cons (quick):

• 0% deposit — pro: preserves cashflow; ease of acquisition. con: usually slightly higher monthly cost or fees; you may pay more overall.
• Pay deposit — pro: lower monthly payments, potentially lower overall interest; improved approval chances. con: higher initial cash outlay.

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Practical steps — reduce or avoid a deposit

• Improve the business credit profile and have recent accounts ready.
• Ask dealers for manufacturer/vendor promotions or longer payment schedules.
• Offer part‑exchange or trade-in to lower cash deposit requirements.
• Consider operating lease or contract hire where suitable.
• Use a broker (or our matching service) to access specialist lenders with better deposit terms.

If you want tailored options, Get Quote Now — Free Eligibility Check and we’ll match you to lenders/brokers who specialise in your asset and sector.

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Documents, timeline & what to expect when enquiring via UK Business Loans

Typical documents lenders request:

• Latest company accounts and management figures
• Bank statements (usually 3–6 months)
• VAT returns (if applicable)
• Asset quotes/invoices and supplier details
• Proof of identity for directors and business registration

Typical timeline:

• Submit enquiry → we match you with suitable brokers/lenders (within hours).
• Indicative quotes often within 24–72 hours depending on asset & lender.
• Formal offer and documentation after due diligence and any credit checks (if you proceed).

Note: submitting an enquiry via UK Business Loans does not affect your credit score. Lenders will only conduct formal checks if you proceed with an application.

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Costs beyond the deposit

Remember the deposit is only one cost. When comparing offers look at:

• Interest / finance rates and APR equivalents
• Arrangement or admin fees
• Maintenance, service and insurance costs (for leases)
• Early repayment charges and residual/balloon amounts
• VAT treatment — lease vs purchase can differ for VAT recovery

Always compare total cost of credit and the effective monthly outlay — a low or zero deposit offer can sometimes cost more in the long run.

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Real examples

Case 1 — Small construction firm: needed a new excavator. Using a specialist asset lender via a broker, the firm put down 10% deposit; the lender accepted because of healthy trading history and a strong resale market for the model. Result: lower monthly payments and ownership after term.

Case 2 — Courier fleet: a fast-growing courier business leased 6 new vans on a contract hire deal with 0% deposit through a dealer finance package. The operator preferred no upfront spend and included maintenance in the rental.

Case 3 — Private clinic: needed an imaging upgrade. A broker secured a package with a 5% deposit and a balloon payment to reduce monthly cost while matching expected equipment lifecycle and resale value.

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Frequently asked questions

Is a deposit always required for asset finance?
No — many products and lenders offer 0% deposit or no‑deposit options, but deposits of 5–20% are common depending on asset age, market and credit risk.

What does 0% deposit mean in practice?
It means no upfront cash is needed, but costs may be distributed across monthly payments or fees. Carefully check the total cost of credit and any balloon payments.

Does a higher deposit reduce monthly payments?
Yes — a higher deposit reduces the capital you finance so monthly payments typically fall and total interest paid can be lower.

Can early-stage companies get asset finance with no deposit?
Possibly. Vendor finance, manufacturer promotions or specialist lenders may offer low-deposit deals, but offers depend on asset type, trading history and sector.

Will checking my options affect my credit score?
No — submitting an enquiry to UK Business Loans does not affect your credit score. Formal credit checks occur only when you progress to an application with a lender.

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Ready to check what deposit you’ll need?

Get a free, no-obligation eligibility check and we’ll match you with brokers and lenders who can quote for assets valued from around £10,000 and upwards. Submit a few details and we’ll do the rest.

Get Quote Now — Free Eligibility Check

We will share the details you submit only with approved lenders/brokers selected for your enquiry. Submitting an enquiry is not an application and does not affect your credit score.

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Legal & compliance

UK Business Loans is an introducer; we do not provide regulated financial advice or lend money. The deposit examples on this page are indicative — actual deposits and full terms are set by lenders and brokers and may vary. Review any offer from a broker or lender carefully before proceeding and seek independent advice where appropriate.

For more detail about asset finance products and to compare the types available, see our asset finance overview page on asset finance.

© UK Business Loans. Service available for UK limited companies and incorporated businesses. We commonly arrange funding from around £10,000 and upwards.

1) Q: Is UK Business Loans a lender?
A: No — UK Business Loans is an introducer that connects UK businesses to FCA-regulated brokers and lenders (we do not lend money or provide regulated financial advice).

2) Q: Will checking my options with UK Business Loans affect my credit score?
A: No — submitting an enquiry is not an application and does not affect your credit score; lenders only carry out formal credit checks if you proceed with an application.

3) Q: Do I need a deposit for asset finance and how much is typical?
A: Many lenders accept 0–20% deposits depending on the asset, lender appetite and your credit/profile (new equipment and manufacturer deals often qualify for 0–10%, while used or specialist items may need 10–20%+).

4) Q: What does a 0% deposit offer actually mean?
A: 0% deposit means no upfront cash is required but the cost is typically recovered through slightly higher monthly payments, fees or balloon/residual structures, so check the total cost of credit.

5) Q: How can I reduce or avoid paying a deposit on asset finance?
A: You can reduce or avoid a deposit by improving your business credit, using vendor/manufacturer promotions, offering part-exchange, choosing operating leases/contract hire or using a broker to access specialist lenders.

6) Q: Can start-ups or businesses with poor credit get asset finance with low or no deposit?
A: Possibly — specialist lenders, vendor finance and some broker-negotiated deals can support early-stage or imperfect-credit businesses, but offers depend on trading history, asset type and lender criteria.

7) Q: What documents will lenders typically ask for when applying for asset finance?
A: Lenders usually request recent company accounts or management accounts, bank statements (3–6 months), VAT returns (if applicable), supplier quotes/invoices and ID/business registration documents.

8) Q: What types of asset finance are available for businesses?
A: Common options include hire purchase, finance lease/conditional sale, operating lease/contract hire and vendor/manufacturer finance, each with different deposit, ownership and tax implications.

9) Q: Besides the deposit, what other costs should I compare between offers?
A: Compare interest rates/APR, arrangement and admin fees, maintenance and insurance costs, VAT treatment, early repayment charges and any residual/balloon amounts to understand the true cost.

10) Q: How quickly will I be matched with lenders and receive quotes through UK Business Loans?
A: You’ll typically be matched with suitable brokers/lenders within hours and can expect indicative quotes within 24–72 hours, with formal offers following due diligence and any required checks.