How Much Does Equipment Finance Cost? UK Guide 2026 | Complete Leasing Solutions

How Much Does Equipment Finance Actually Cost? A Plain-English Guide for UK Business Owners

Equipment finance is one of the most useful funding tools available to UK businesses — but the cost question puts a lot of people off. Interest rates, APRs, arrangement fees, residual values — it can feel deliberately complicated. It isn’t. This guide breaks it all down in plain English so you know exactly what you are paying and why.

The honest answer: it depends on four things

There is no single rate for equipment finance. What you pay depends on your business’s credit profile, the type of asset being financed, the term length, and the finance type — finance lease, hire purchase and operating lease are all priced differently.

Current equipment finance rates in the UK

With the Bank of England base rate at 3.75%, most equipment finance is priced at base rate plus a margin reflecting the lender’s risk assessment of your business and the asset.

• Established businesses, clean credit, new equipment: 4–8% APR
• Established businesses, minor credit issues or used equipment: 8–12% APR
• Startup businesses or those with adverse credit: 12–20% APR
• Specialist or high-risk assets: up to 20%+ APR

Finance lease rates tend to sit slightly lower than hire purchase because the lender retains the asset at the end of the term — they carry some of the residual value risk, which reduces their exposure.

Real examples: what does it actually cost per month?

Here are some worked examples based on typical 2026 market rates for an established UK business with a clean credit history.

Commercial catering equipment, £15,000 over 36 months at 6% APR — approximately £456 per month, £16,416 total repaid, £1,416 total cost of finance.

Manufacturing machinery, £75,000 over 48 months at 7% APR — approximately £1,793 per month, £86,064 total repaid, £11,064 total cost of finance.

IT equipment bundle, £8,000 over 24 months at 8% APR — approximately £362 per month, £8,688 total repaid, £688 total cost of finance.

Startup business, commercial equipment, £20,000 over 36 months at 15% APR — approximately £694 per month, £24,984 total repaid, £4,984 total cost of finance.

Use our online calculator to run your own figures.

What fees should you watch out for?

The interest rate is not always the only cost. Some lenders charge additional fees — a good broker will flag these upfront. Common ones to be aware of:

• Arrangement or documentation fee — typically £150–£500 depending on deal size, sometimes added to the finance amount rather than charged upfront
• Option to purchase fee — on hire purchase agreements, a small fee (often £1–£100) payable at the end to transfer ownership
• Early settlement fee — some lenders charge a penalty for settling early, though many do not. Always check this before signing
• Late payment charges — standard across all lenders, usually a fixed fee per missed payment

At Complete Leasing Solutions there are no broker fees charged to you — we are paid by the lender on completion of a successful application. See our terms of business for full details.

Finance lease vs hire purchase: which costs less?

Finance lease monthly payments are typically 10–20% lower than hire purchase on the same asset — but that does not mean it is cheaper overall. With a finance lease the lender retains ownership and you never fully pay off the asset’s value. With hire purchase you pay off the full value plus interest and own it outright at the end. The right choice depends on whether you want to own the asset or simply use it. See our Lease v Buy guide for a full breakdown.

Does a higher rate always mean a worse deal?

Not necessarily. A higher rate deal that gets approved is always better than a lower rate deal that gets declined. For a startup or a business with a complex credit history, accessing finance at 15% APR to buy £30,000 of revenue-generating equipment is almost always the right commercial decision. The question to ask is not “what is the rate?” but “does the monthly repayment work within my cash flow, and does the equipment generate more than it costs?”

How do you get the best rate?

The single most effective thing you can do is use a whole-of-market broker rather than going directly to one lender. A single lender will offer you their rate — take it or leave it. A broker with access to 200+ lenders can approach the whole market simultaneously and find the most competitive rate for your specific profile and asset type. Different lenders specialise in different sectors — a lender competitive on catering equipment may be expensive on IT, and vice versa. A good broker also knows which lenders are most likely to approve your application, saving you multiple credit searches that can damage your credit score.

What about VAT?

VAT is charged on monthly lease and hire purchase payments and is reclaimable by VAT-registered businesses in the normal way. The effective monthly cost for a VAT-registered business is the net figure — the VAT element comes straight back on your next VAT return.

Summary: what to expect

• Well-established business, clean credit, standard equipment: 4–8% APR
• Good business, minor credit issues or used equipment: 8–12% APR
• Startup or adverse credit: 12–20% APR
• Broker fees from CLS: none
• Decision time: 24 hours for most applications
• Minimum amount: from £5,000

The best way to find out exactly what your equipment finance would cost is to get a quote — it takes minutes, there is no obligation and it will not affect your credit score at the enquiry stage. Or call us on 0191 250 1550 — Monday to Thursday 9am–5:30pm, Friday 9am–5pm.

You can also browse our frequently asked questions or read our case studies to see how we have helped businesses like yours.