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What is Business Hire Purchase?

Business Hire Purchase is a flexible and cash-flow friendly way to fund expensive items like equipment or vehicles without paying in full upfront.

You ‘hire’ the asset you need by making regular monthly payments over an agreed period of time. At the end of your hire purchase agreement, you have the option to ‘purchase’ the asset to own it.

  • Let’s talk about Hire Purchase

    As you look around your business you will see the things that are essential to its day-to-day success. Depending on what you do this might include machinery, vehicles, or IT equipment.

    All these “assets “cost money and don’t last forever, so keeping things up to date and investing in new ones may often be on your mind.

    In addition, if you are planning to grow, develop new products or services, or become more efficient and sustainable, this might also mean you need to invest more.

    This is where asset finance can come in, a simple way to help you finance the assets you need to help your business thrive.

    Asset finance can allow you to borrow the money you need to either buy or lease the assets you want and looks to the value of the asset as the security for the amount you need to borrow.

    Hire Purchase, or HP, is one form of asset finance that can help you fund a new asset and ends with you owning it outright.

    In simple terms, HP works like this: you identify the asset you want, pay us a 10% deposit, we then buy the asset on your behalf and “hire” it to you over an agreed term, usually between 12 and 60 months. We then charge you monthly “rentals” that cover the remaining cost and the interest on the amount borrowed.

    When you have settled the total outstanding, you pay a small “option to purchase” fee and we transfer the asset to your ownership.

    So, you Hire it first and Purchase it at the end, hence Hire Purchase. If you don’t want to own the asset at the end of the term, there are other options, including Finance Lease.

    Lloyds Bank have been providing asset finance solutions for many years. We have a team of specialists on hand to ensure you get the right support and the help you need to choose the solution that is right for your business.

Calculate your Hire Purchase payments

For assets between £15,000 and £150,000 use our illustrative calculator to see what your monthly costs could be.

Get a quote

How Hire Purchase can help your business

Fund up to 90%

Funding starts at £15,000 after a minimum deposit of 10%.

Choose what you need

Find the new or used equipment that works for your business and budget.

Flexible terms

Select any repayment period between 12 and 60 months to suit your business.

Monthly payments

Regular payments make it easier to budget and manage cash flow.

Repayment options

Fixed or variable rates available to suit your business.

Own your asset

Option to purchase fee at the end of the term gives you full ownership.

Does your business qualify for Hire Purchase?

  • Available to new and existing Lloyds Bank customers
  • The asset must be for use in your business and less than 7 years old
  • Your turnover must be more than £100,000 per annum
  • You must have been trading for a minimum of 24 months and be UK-based

What you’ll need to apply

  • Details of the asset you want to purchase
  • The cost of the asset
  • Your preferred term length and deposit amount

Apply now for Hire Purchase

Existing Lloyds Bank customers can log on and apply online for Hire Purchase for assets between £15,000 and £150,000.

Apply now

What can I finance using Business Hire Purchase?

  • Transportation
    Heavy Goods Vehicles (HGVs), buses and coaches, trailers, cars and vans.
  • Agriculture
    Tractors, combines, biomass, forestry, automation and livestock trailers.
  • Manufacturing
    Processing and packaging machinery, production lines, CNC and robotics.
  • Construction
    Construction equipment, diggers, bulldozers, drills and cranes.
  • Renewable
    Small scale renewables, solar panels, air source heating, biomass boilers, Combined Heat & Power (CHP).

How the Hire Purchase process works

1. Get a quote

Let us know what asset you want to fund and we’ll give you a tailored quote.

2. Tell us to go ahead

If you want to proceed, one of our specialists will provide a credit assessment and agreement.

3. Collect your asset

We’ll pay your supplier, within 15 days for some assets, and you can collect your asset.

Frequently asked questions

  • Hire Purchase, or HP, is one form of asset finance that helps you fund a new asset and ends with you owning it outright. In simple terms HP works like this:

    You find the asset you want, pay us a 10% deposit, we then buy the asset on your behalf and “hire” it to you over an agreed term, usually between 12 and 60 months, and charge you monthly “rentals” that cover the remaining cost and the interest on the amount borrowed.

    When you have settled the total outstanding you pay a small “option to purchase” fee and we transfer the asset to your ownership.

    So, you hire it first and purchase it at the end, hence the name Hire Purchase.

  • Yes, you can but you may need to pay early repayment charges. You can speak to one of our specialists to find out more.

  • As above, you can cancel your agreement but early repayment charges may apply. You can speak to one of our specialists to find out more.

Tax allowances with Hire Purchase

Super-Deduction

Super-Deduction is a capital allowance which applies to qualifying plant and machinery investments. Companies can claim 130% tax relief and qualify for 50% First Year Allowance (FYA) on special rate long-life assets until 31 March 2023.

Super-Deduction

Annual Investment Allowance

The Annual Investment Allowance (AIA) is a regular capital allowance which applies to purchased assets that are used and kept within a business. The AIA limit is set at £1,000,000 until 31 March 2023.
 

Annual Investment Allowance (PDF, 130KB)

Manage your existing Hire Purchase agreement

You may need to make changes throughout the life of your Hire Purchase agreement.

Find out how to make a change if you need to.

How to make a change (PDF, 117KB)

Other borrowing options

Whether you're an established business or just starting out, finding the right finance product can be difficult.

Compare and choose our products, whatever your business circumstances.

View all borrowing

*Subject to normal VAT rules.

Important Legal Information

Lloyds Bank plc, Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England & Wales no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.

Lloyds UDT Leasing Limited, Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England & Wales no. 665240.

Lloyds Bank Asset Finance, part of Lloyds Banking Group, is a member of the Finance & Leasing Association (FLA) and complies with the FLA Business Code of Practice. Lloyds Banking Group is a member of the Lending Standards Board (LSB) and complies with the LSB Standards of Lending Practice for Business Customers (Asset Finance). Further information is available from the FLA at www.fla.org.uk and from the LSB at www.lendingstandardsboard.org.uk.

We are covered by the Financial Ombudsman Service (FOS). Please note that due to FOS eligibility criteria not all business customers will be covered.

The provision of our credit or leasing services by us is subject to you meeting our credit approval. Please ensure that you only apply for credit or leasing services that you can comfortably afford.