Comparison of Equipment Finance Providers

Equipment finance is funding for buying the machinery, tools, or tech you need to grow, without paying for everything upfront. Equipment finance companies give you a way to spread the cost of big-ticket items like IT systems, vehicles, or industrial equipment – usually through leases or loans.

It can be a flexible, cost-effective way to invest in your future: you get the gear you need while keeping enough free cash flow for any emergencies or shortfalls. And since the equipment often serves as collateral, being approved for finance is easier than with a traditional business loan.

This kind of financing also helps your business to be as competitive as possible. You can upgrade instantly, meaning you’re operating at peak capacity for longer, and depending on the terms, you can choose to buy the equipment outright at the end of the finance period, or hand it back and get something new.

For SMEs, there are two routes for equipment finance: Traditional lenders (like banks and credit unions) and alternative lenders (new, innovative lenders that have emerged outside the established financial ecosystem).

The proportion of SMEs planning to apply for finance has now returned to pre-pandemic levels. For these businesses, there’s more choice now than ever.

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What are the main differences between traditional and alternative lenders? 

Traditional lenders typically offer loans with strict criteria, focusing on trading history, income, and collateral.

These institutions often have longer approval processes and focus on more established businesses. Since 2018, there’s been a marked decline in these lenders approving loans for SMEs: the success rate of SME applications for bank loans fell from 80% in 2018 to around 50% in 2023.As the success rate of SME applications has fallen, so has the big banks' share of smaller business lending, declining to a low of 41% in 2023. Alternative lenders have stepped in to fill the gap and their influence has grown. 

Alternative lenders use more flexible and innovative methods to assess creditworthiness, often using information like bank statements or accounting software data. They also tend to approve loans much faster than traditional lenders.

Let’s look at a few traditional and alternative lenders, and compare their small business equipment loan offerings.

Equipment finance comparison: traditional lenders

1. Societe Generale Equipment Finance (SGEF)

Loan Eligibility: SMEs, corporates, and vendors in various industries. Specific eligibility details depend on the region and business requirements.

Minimum Loan: Not explicitly stated.

Maximum Loan Value: SGEF doesn’t provide a fixed maximum value.

Interest Rates and Fees: Rates typically depend on market conditions, asset types, and the client's credit profile.

Loan Terms: Flexible terms are available. Maximum durations are case-specific.

Industry Niche(s): Transportation, healthcare, green energy, industrial equipment, and technology.

Products and services:

• Leasing.
• Hire purchase.
• Sale-leasebacks.
• Structured off-balance-sheet facilities.

2. HSBC Equipment Finance

Loan Eligibility: Available to businesses looking to purchase or lease equipment for operations. Requires credit approval and documentation supporting financial stability and project viability.

Minimum Loan: Depends on the business proposal and equipment type.

Maximum Loan Value: Based on business needs and the cost of the equipment.

Interest Rates and Fees: Interest rates are linked to creditworthiness, market rates, and specific agreements. Fees may include administrative and processing charges. These are determined on a case-by-case basis.

Loan Terms: Offers flexible repayment plans tailored to the cash flow of the business. Financing can extend to cover the full cost of equipment with structured repayments.

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Industry Niche(s): n/a.

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Products and Services:

• Equipment leasing and hire purchase options.
• Sustainability-linked loans are available for businesses investing in green or energy-efficient equipment.
• Financing solutions integrate flexibility for tax or accounting advantages.

3.  Barclays Asset Finance

Loan Eligibility: Available to businesses with a turnover of up to £6.5 million (for SMEs) or up to £25 million (for agricultural clients). Financing is subject to Barclays’ credit policy and application process.

Minimum Loan: Specific minimums are not stated, but financing is offered for both small-scale needs (e.g. up to £100,000 via Propel) and larger purchases.

Maximum Loan Value: Financing up to £2 million is commonly supported through Propel's partnership. Larger loans above £2 million are available for qualifying businesses.

Interest Rates and Fees: Based on client needs, and financing terms depend on the type of asset finance product. Additional fees may apply depending on product specifics.

Loan Terms: Flexible terms, allowing businesses to spread payments over several years. Payment structures, including seasonal or balloon payments, may be arranged depending on the client’s situation.

Industry Niche(s): n/a

Products and Services:

• Hire Purchase: Own the asset after completing payments.
• Finance Leasing: Use the asset over the lease period without ownership.
• Operating Leasing: Shorter leases without the responsibility of owning the asset.
• Partnership with Propel: Quick approvals for loans up to £100,000, often within 24 hours

4. Santander Business Equipment Finance.

Loan Eligibility: Businesses that have been operational for two years or more, with eligibility varying based on creditworthiness and specific financing needs​.

Minimum Loan: Typically starts at £25,000.

Maximum Loan Value: Based on the equipment and business needs​.

Interest Rates and Fees: Depend on business creditworthiness and market conditions​.

Loan Terms: Loan durations range from 3 to 10 years, offering flexibility for repayment. Financing can be tailored for vehicles and equipment in sectors like medical, construction, and agriculture​

Industry Niche(s): n/a

Products and Services:

• Hire Purchase: Acquire ownership of the equipment after completing fixed payments.
• Leasing Options: Access equipment without full upfront payment while spreading costs over time.
• Comprehensive Support: Financing includes additional costs such as taxes, warranties, and training

Equipment finance comparison: specialist lenders

1. Close Brothers Asset Finance

Loan Eligibility: Available to UK-based businesses of various sizes, including SMEs, seeking to finance vehicles, machinery, or other critical equipment. Eligibility is subject to financial assessments, credit checks, and specific asset requirements.

Minimum Loan Amount: Not explicitly mentioned. Solutions are tailored to meet individual business needs and can start with smaller assets.

Maximum Loan Value: No fixed upper limit is specified. Loans are tailored based on the equipment's value, sector-specific requirements, and repayment capabilities.

Interest Rates and Fees: Fixed or variable, and structured based on creditworthiness and loan type. Additional fees may include documentation or administration charges, typically clarified during the application.

Loan Terms: Repayment terms are flexible, often spanning up to five years, depending on the financing product. Seasonal payment structures can also be arranged for industries with fluctuating income.

Industry Niche(s): n/a

Products and Services:

• Hire Purchase: Allows ownership transfer after payments, ideal for businesses needing high-value assets.
• Finance Lease: Use equipment without immediate ownership, with fixed monthly costs.
• Operating Lease: Shorter-term solutions ideal for assets with quick depreciation.
• Asset Refinance: Enables businesses to release capital tied up in existing equipment.
  
  

2. Aldermore Equipment Finance

Loan Eligibility: Aldermore provides asset finance to businesses, including sole traders, partnerships, limited companies, and limited liability partnerships. They consider the financial health of the business, its performance, and credit background when assessing loan eligibility.

Minimum Loan: The minimum loan amount for refinancing is £25,000. Deals under this amount may require specific conditions or additional security​.

Maximum Loan Value: For refinancing, Aldermore considers deals up to £150,000 without additional security, but deals above this amount may require extra guarantees, such as waivers from debenture holders​.

Interest Rates and Fees: Rates depend on the asset, deal specifics, and the customer's financial position. They offer flexible repayment options and may include charges for services like refinancing​

Loan Terms: Loan terms typically range from one to five years, but Aldermore offers flexibility with seasonality adjustments, particularly for sectors like agriculture. They also offer options like finance and operating leases with tailored terms to meet business cash flows​

Industry Niche(s): Construction, transportation, agriculture, manufacturing and logistics​.

Products and Services: Aldermore provides a variety of asset finance products, including:

• Hire Purchase: Option to purchase the asset at the end of the term.
• Finance Lease: Allows businesses to rent the asset and potentially buy it at the end of the lease period.
• Operating Lease: A lease option where Aldermore retains the residual risk, and businesses can return or upgrade the asset at the lease's end.
• Refinance: For businesses that want to unlock equity from existing equipment, useful for funding projects or purchasing new assets.
  
  

3. BNP Paribas Leasing Solutions

Loan eligibility: Eligibility is dependent on the specific equipment and business sector. The company works with various sectors including agriculture, construction, healthcare, ICT, materials handling, and transportation​

Minimum loan: Bespoke financing solutions, which likely include flexible terms for different business sizes and types​.

Maximum loan value: Similar to minimum loans, maximum loan values are tailored to the business's needs and equipment type.

Interest rates and fees: Dependent on the borrower’s profile and circumstances.Loan terms: BNP Paribas specialises in long-term and usage-based financing models, with options for flexible repayment​

Industry niche: Agriculture, healthcare, construction, transportation, and ICT.

Products and services:

• Tailored leasing.
• Hire purchase.
• Working capital solutions.

4. Lombard Asset Finance

Loan Eligibility: UK businesses across various sectors. They assess businesses based on creditworthiness and the specific assets to be financed.

Minimum Loan: Not detailed.

Maximum Loan Value: Not detailed.

Interest Rates and Fees: Rates vary based on asset type, business sector, and credit assessment.

Loan Terms: Lombard offers flexible loan terms with options ranging from short-term agreements to longer durations, depending on the asset type and business needs​.

Industry Niche(s): Agriculture, construction, healthcare, technology.

Products and Services:

• Hire purchase.
• Finance lease.
• Contract hire.

5. Investec Asset Finance

Loan Eligibility: Available to small-to-medium-sized enterprises (SMEs) as well as larger corporations across various sectors.

Minimum Loan: Not specified.

Maximum Loan Value: Varies based on the asset and the business’s financial situation. Investec handles high-value assets, including luxury items such as yachts and aircraft, as well as more conventional business assets​.

Interest Rates and Fees: Flexible.
Loan Terms: Based on the client’s requirements and circumstances.

Industry Niche(s): n/a.

Products and Services:

• Hire purchase.
• Fixed-term leases.
• Receivables funding.

6. Ultimate Finance

Loan eligibility: Available for both limited and non-limited businesses in the UK.

Minimum loan: £1,000​.

Maximum loan value: Up to £500,000 for a single asset. Up to £1.5 million for a single customer​.

Interest Rates and Fees: Based on the business requirements​.

7. Bibby Financial Services

Loan eligibility: UK-based businesses.

Minimum loan: £10,000​.

Maximum loan value: Up to £500,000​.

Interest rates and fees: Not specified.

Loan terms: From 12 to 60 months​

Industry niche(s): Construction, transport, wholesale, and manufacturing​.

Products and services:

• Hire purchase.
• Leasing.
• Refinancing for existing assets.

8. JCB Finance

Loan Eligibility: UK-based businesses purchasing JCB machinery, equipment, or commercial vehicles. Eligibility is subject to credit approval and affordability checks.

Minimum Loan Amount: £5,000​

Maximum Loan Value: Determined by the specific asset, agreement terms, and customer eligibility​.

Interest Rates and Fees: Interest rates vary based on the type of agreement (e.g., Hire Purchase, FlexiLease). Example offers include 0% interest hire purchase for specific models over 24 months. Additional fees such as a £245 documentation fee and an option-to-purchase fee (£40+VAT) apply​.

Loan Terms: Flexible repayment terms, typically structured over 2–5 years, with options for fixed or variable rates depending on the customer’s preference​.

Industry Niche(s): Primarily supports the purchase of JCB machinery and related equipment​.

Products and Services:

• Hire Purchase (HP): Ownership transfers after full repayment; fixed or variable rates are available.
• FlexiLease: A leasing option with potential cash-back on the sale of the asset, lower instalments compared to HP, and return conditions applied at the lease's end.
• Finance Lease and Operating Lease: Spread costs over time without ownership.

How to choose the right equipment finance provider

Being selective about who you apply to for finance will not only save you time and effort on paperwork and applications, but also help you make the most of the cash and minimise the cost and risk for your business. Here are the key points to consider when picking a lender for equipment finance.

Interest Rates and Fees: Rates typically range from 4-15% depending on the provider and the borrower’s creditworthiness. Compare fees across providers to find the best deal.

Loan Terms: Most equipment finance agreements last 1-5 years, with some lenders offering more flexible repayment schedules to suit your business needs.

Eligibility Criteria: High street banks tend to have stricter requirements, such as credit history and long business track record, whereas alternative lenders offer more flexibility, with less emphasis on credit scores and more focus on cash flow and business performance.

Speed and Ease of Application: Traditional banks can take weeks to approve financing, while alternative lenders offer much quicker, tech-driven processes, often providing decisions in hours and funds in days.

Alternatives to equipment finance

A big issue with equipment finance is that it’s limited. It’s tied to a particular asset, meaning how you invest the money into your business is dictated by the terms.

A Flexi-Loan from iwoca is different. Our Flexi-loan agreements aren’t tied to a particular asset. Once you’re approved, you can draw down funds as needed, and you only pay interest on the amount you use.

For example, you can use your Flexi-Loan to buy equipment – or you can use it for marketing or urgent repairs. It’s up to you. The Flexi-Loan works around your needs.

• Applications take just a few minutes, and you can be approved in as little as 24 hours.
• Borrow between £1,000 and £1,000,000, which you can use for any business need, from one day up to five years.
• Only incur interest on the amount you draw down – and you can always overpay or repay your loan early, so you can control how much interest you pay.

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Equipment Finance FAQs

What is equipment finance?

Equipment finance helps businesses purchase or lease machinery, tools, or technology without paying the full cost upfront. It spreads the expense over time, often through loans or leases, allowing businesses to maintain cash flow while accessing essential equipment.

What are the benefits of equipment finance?

Equipment finance helps businesses upgrade quickly, maintain competitiveness, and manage cash flow effectively. It often comes with flexible terms and approval processes, as the equipment serves as collateral.

What’s the difference between traditional and alternative lenders?

Traditional lenders, like banks, offer equipment loans with stricter eligibility criteria and longer approval times. Alternative lenders may offer specialist services or industry niches, potentially with a more up to date technology-based experience.

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