What rates and fees should food businesses expect for asset & equipment financing in the UK?

Summary: If you run a bakery, food manufacturing operation, restaurant or catering business, expect a wide spread of rates: secured asset finance on new equipment often sits in the lower single digits to low‑teens (4%–12% p.a. indicative), while unsecured or short‑term options can reach double digits or higher (10%–35%+ APR). Typical one‑off fees include arrangement/origination (0.5%–3% or fixed), documentation £50–£500, valuation £0–£300 and early settlement penalties. For a tailored, no‑obligation quote and eligibility check, Get a Free Eligibility Check.

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Quick rates summary (indicative)

Indicative ranges for UK food businesses. Actual offers depend on lender, business profile, asset and term. Indicative only — subject to lender assessment.

Product	Typical effective rate (indicative)	Typical fees / upfront costs
Asset finance (secured, new equipment)	4% – 12% p.a.	Arrangement fee 0.5%–2%
Hire Purchase (HP)	6% – 18% APR	Deposit 0–30%; documentation £50–£500
Finance lease / operating lease	5% – 15% p.a. (rental equivalent)	Admin fee 0.5%–1.5%; VAT on rentals
Sale & leaseback	6% – 16% p.a.	Transaction costs 1%–3%
Short-term / unsecured equipment loans	10% – 35%+ APR	Higher arrangement & servicing fees

Note: figures are illustrative. Lenders price by risk, loan size, asset life and security. For a tailored comparison Get Quote Now.

What determines the rate you’ll be offered

Understanding what drives price helps you improve offers.

Credit profile & trading history

Established, profitable companies with several years of accounts and steady cash flow generally receive better rates than newly formed businesses. Directors’ credit history and historic payment behaviour are significant for many lenders.

Asset type, age & resale value

New, specialist production lines (vacuum packers, industrial ovens, chillers) that retain resale value attract lower rates. High‑wear items or very old equipment increase perceived risk and push rates higher.

Term length & deposit

Longer terms reduce monthly payments but may increase total interest. A deposit or balloon payment can materially lower rates and widen lender choice.

Security & collateral

Secured finance (asset as collateral) is usually cheaper than unsecured lending. Unsecured options are quicker but cost more.

VAT, seasonality & cashflow

Food businesses with volatile trading or strong seasonality are riskier. Demonstrated contracts, supply agreements or predictable contracts with retailers help reduce perceived risk.

Lender type

Banks often offer competitive rates for prime borrowers; specialist asset financiers and alternative lenders may be more flexible on asset types or weaker credit but at higher cost. A broker can match your case to the most suitable lenders quickly.

Quick tip: For specialist food production equipment, specialist asset finance brokers often secure better terms than generalist lenders. Free Eligibility Check

Finance products explained — how cost varies by type

Different products fit different needs. Below are the common options for food businesses and what to expect.

Asset finance / equipment finance

Used to buy equipment while spreading cost. Often secured against the asset, so rates are relatively low (4%–12% p.a. indicative). Fees: arrangement, documentation, occasional valuation.

• Pros: lower rates, ownership potential; good for high‑value machinery.
• Cons: asset on balance sheet; lenders may require maintenance/insurance covenants.

Hire Purchase (HP)

Hire purchase lets you spread the cost and take ownership after final payment. Rates vary (6%–18% APR depending on credit). Upfront deposit lowers monthly payments and may secure a better rate.

• Pros: ownership at term end, fixed repayments.
• Cons: asset sits as security; sometimes higher paperwork fees.

Finance lease / operating lease

Leasing keeps equipment off your balance sheet in some cases and is suitable when you want to upgrade regularly. You pay rentals; effective cost typically 5%–15% p.a. VAT treatment differs from HP.

Sale & leaseback

If you already own expensive machinery, sale & leaseback frees cash by selling to a funder then leasing it back. Rates are often a bit higher than standard leasing and include transaction costs (1%–3%).

Chattel mortgage / commercial loan

When you want to own immediately and prefer a secured loan structure, rates vary widely by lender and borrower profile.

Short‑term & unsecured options

Good for urgent needs but typically expensive (10%–35%+ APR). Use only if speed outweighs cost, and consider alternatives for larger sums (we focus on requests from approx. £10,000 upwards).

What to check: VAT treatment, who is responsible for maintenance, end‑of‑term options (purchase, return, renewal).

Common fees and charges to expect

Beyond interest, lenders commonly charge the following:

• Arrangement / origination fee: 0.5%–3% of facility or fixed fee (or both).
• Documentation / legal fee: £50–£400 depending on complexity.
• Valuation / inspection fee: £0–£300 for specialist machinery.
• Early settlement / termination fee: Often a percentage of remaining balance; check the T&Cs.
• Late payment / default fees: Fixed charge plus increased interest — ask to see exact figures.
• Administration / monthly servicing fees: £5–£30 per month in some products.
• Transaction fees (sale & leaseback): 1%–3% plus legal fees.
• Insurance & maintenance: Lenders may require asset insurance and proof of regular servicing.

Always ask lenders for a full written breakdown. If anything is unclear, request an illustration showing total cost over the term.

Practical examples (illustrative)

These short case studies show how structure and numbers combine (illustrative only).

Case 1 — Bakery: New oven £25,000 (Hire Purchase)

Scenario: 20% deposit (£5,000), 4‑year HP, illustrative APR 8%.

Estimated monthly repayment: ~£456. Total interest over 4 years: ~£4,872. Arrangement & documentation fees: £150–£400. Early settlement penalties may apply.

What a broker can do: compare HP quotes, negotiate reduced arrangement fee or extended term to lower monthly cost. Get Quote Now

Case 2 — Food manufacturer: Packaging line £150,000 (Asset finance)

Scenario: 10% deposit, 6‑year term, indicative rate 6% p.a.

Monthly repayments are lower relative to HP due to long term; lenders consider warranty, maintenance and residual. Fees: arrangement 0.75% (~£1,125), valuation and legal fees may apply.

Benefit: preserves working capital and spreads cost without committing to a high monthly outlay.

Case 3 — Mobile caterer: Used food truck £30,000 (Finance lease/HP)

Scenario: used vehicle, higher rate due to age — illustrative 12% APR over 5 years, low deposit option available.

Repayments higher than new financed HP; always check mileage and mechanical checks before financing. Specialist brokers can often secure lender acceptance for modified catering vehicles.

How to get the best rate — practical tips

• Prepare trading accounts, bank statements and a short cashflow forecast — clear documents speed up and improve offers.
• Use a deposit where possible — even 10% can lower monthly costs and widen lender choice.
• Consider longer terms to reduce monthly cost, but check total interest paid.
• Get multiple quotes — different lenders specialise in different equipment types and sectors.
• Work with a specialist broker — they can present your case to suitable lenders and negotiate fees.
• Keep equipment well maintained and insured — preserving resale value helps secure better rates.

UK Business Loans connects you quickly with lenders and brokers who understand the food sector and asset finance. If you want a fast, no‑obligation comparison, Start your enquiry now.

For related support and broader options for the sector see our page on food industry business loans.

Frequently asked questions

Are the sample rates shown here guaranteed?
No — all figures are indicative. Lenders will provide personalised offers after reviewing business accounts, the asset and your circumstances.

Will lenders do a credit check?
Lenders or brokers may perform credit checks if you progress to an application. Submitting an initial enquiry does not itself create a credit search.

Can I finance second‑hand equipment?
Yes — many funders finance used equipment. Expect closer scrutiny of age, condition and expected resale value; specialist asset financiers often lead here.

Is it better to lease or buy?
Leasing can be cheaper month‑to‑month and helps with regular upgrades; buying via HP builds ownership and may be better for long‑life assets. Ask for a side‑by‑side comparison.

Next steps & legal note

Need a quick comparison tailored to your food business? Complete a short enquiry and we’ll match you with lenders and brokers that can provide quotes for equipment and asset finance from around £10,000 upwards. Get a Free Eligibility Check.

Contact options: Complete the online form for a rapid response, or include your phone number and a broker may call to discuss options.

UK Business Loans introduces businesses to lenders and brokers — we do not lend directly or provide regulated financial advice. All finance offers are subject to lender eligibility checks and terms. Rates and fees above are indicative and will vary by lender and individual circumstances. Please request full written terms from any lender before proceeding.

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Image suggestions and alt text for publishers:

• Hero image: commercial kitchen or food production line — alt=”Bakery kitchen equipment financing: industrial ovens and mixers”.
• Infographic: table of indicative rates and fees — alt=”Indicative asset finance rates and typical fees for food businesses”.
• Icons: asset types (ovens, chillers, packaging) — alt=”Icons of ovens, chillers and packaging equipment for finance”.

Last updated: 30 October 2025

1. What rates can food businesses expect for equipment or asset finance in the UK?
Indicative rates for food businesses typically range from around 4%–12% p.a. for secured asset finance on new equipment and 10%–35%+ APR for unsecured or short‑term options, with actual offers varying by lender and business profile.

2. What typical fees should I budget for when financing kitchen or production equipment?
Common fees include arrangement/origination fees of about 0.5%–3% (or fixed), documentation/legal fees £50–£500, valuation fees £0–£300, plus possible early settlement and monthly administration charges.

3. Can I finance second‑hand kitchen or catering equipment?
Yes — many lenders will finance used equipment, though rates, maximum terms and acceptance depend on the asset’s age, condition and resale value.

4. Is hire purchase or leasing better for a restaurant or bakery?
Hire purchase suits businesses that want to own equipment at the end of the term, while leases typically offer lower short‑term costs and easier upgrades, so the best choice depends on your cashflow and long‑term plans.

5. Will submitting an enquiry through UK Business Loans affect my credit score?
No — completing an enquiry form on UK Business Loans does not affect your credit score, though individual lenders may perform credit checks if you progress to a formal application and will inform you first.

6. How long does it take to receive personalised equipment finance quotes?
After you submit the short enquiry, our lender and broker partners typically respond within hours on business days, sometimes within minutes for straightforward requests, with detailed offers taking longer if valuations or legal checks are needed.

7. What information do lenders and brokers usually need to assess an equipment finance request?
Lenders commonly ask for recent trading accounts, bank statements, details of the equipment (age, value, make/model), a brief cashflow forecast and director credit information to deliver accurate quotes.

8. Can start‑ups or businesses with imperfect credit get asset finance for food industry equipment?
Yes — some specialist lenders and brokers work with start‑ups and businesses with adverse credit, though rates and terms may be higher and options depend on the asset and overall business profile.

9. How can I get the best possible rate on equipment finance?
Improve offers by preparing clear accounts and bank statements, putting down a deposit, choosing an appropriate term, comparing multiple lenders and working with a specialist asset finance broker to negotiate fees and structure.

10. Is UK Business Loans a lender and am I committing to anything by enquiring?
No — UK Business Loans is an introducer that does not lend or provide regulated financial advice, and submitting an enquiry is a free, no‑obligation way to be matched with suitable UK lenders and brokers.