When 100% Plant Finance Is Available
Zero deposit plant finance is not a niche or exotic product - it's offered by several mainstream specialist lenders as a standard option. The key variables that determine whether you qualify:
| Criteria | Favourable for Zero Deposit | May Require a Deposit |
|---|---|---|
| Credit Profile | Clean credit (business and directors), no adverse in past 3+ years | Any CCJs, defaults, missed payments, IVAs |
| Business Trading History | 2+ years trading with filed accounts | Under 2 years, or start-up |
| Asset Age | New or under 3 years old | 3-10 years old (deposit likely); 10+ years (deposit almost certain) |
| Asset Brand | JCB, Komatsu, Volvo, Caterpillar, Manitou - known residuals | Obscure brands, poor provenance, unknown condition |
| Business Turnover | Turnover comfortably services the proposed payment | Borderline debt service coverage |
| Finance Amount | Under £250,000 for most lenders without property security | Larger amounts may require additional security or partial deposit |
Alternatives to a Cash Deposit
If a lender requires a deposit but you do not have cash to put in, there are legitimate alternatives that can serve the same purpose:
| Part-Exchange | Trading in existing plant against a new purchase is the most common deposit alternative. The part-exchange value is agreed by supplier and lender, and reduces the amount to be financed. Standard practice across the industry. |
|---|---|
| Security Over Other Assets | Some lenders will accept a charge over other business assets (existing unencumbered plant, vehicles, or in some cases property) in lieu of a cash deposit. Less common but available with the right lender. |
| Director Guarantee | A personal guarantee from the director(s) does not replace a deposit but can sometimes reduce the required deposit percentage - particularly for established businesses with clean credit where the DG adds meaningful security. |
| Structured Advance Payments | Some lenders will accept 3-6 months' rentals paid in advance rather than a traditional deposit. This achieves a similar risk reduction for the lender while allowing the cash to be recovered quickly through the business. |
Lenders Who Offer Low / Zero Deposit Plant Finance
| Lender | Zero Deposit Available? | Conditions | Rate Premium vs 20% Deposit |
|---|---|---|---|
| Close Brothers Asset Finance | Yes | Clean credit, established business, new or late-used plant, up to £500k | Approx 0.5-1.5% |
| Aldermore Bank | Yes | Clean credit, 2+ years trading, good bank conduct, new plant preferred | Approx 1.0-2.0% |
| Novuna Business Finance | Yes | Strong credit score, new plant, established business, up to £250k | Approx 0.5-1.0% |
| Lombard (NatWest) | Sometimes | Larger amounts, established companies with banking relationship, new plant | Variable by deal structure |
| Haydock Finance | Rarely | Only for strong credits - more commonly requires 10-15% deposit | N/A - deposit usually required |
| Time Finance | No | Typically requires 10-30% deposit depending on credit profile and asset | N/A |
The Real Trade-Off: Higher Monthly Payments vs Preserved Capital
Lower monthly cost
With a deposit (20%)
- Lower monthly payment - 20% less principal to finance
- Better interest rate - typically 1-2% below zero-deposit equivalent
- Less risk of negative equity in early months
- Wider lender choice including some who won't do zero deposit
- Cash outlay reduces working capital immediately
Preserved working capital
Zero deposit
- No upfront cash tied up in the asset
- Cash stays liquid - usable for labour, materials, working capital
- Useful if winning a contract that requires immediate plant deployment
- Higher monthly payment - financing the full asset cost
- Slightly higher rate - typically 1-2% premium
Worked Example: Telehandler £48,000 - Deposit vs Zero Deposit (5-Year HP at 7.5% APR)
| Scenario | Deposit | Amount Financed | APR | Monthly Payment | Total Cost of Finance |
|---|---|---|---|---|---|
| 20% Deposit | £9,600 | £38,400 | 7.5% | approx £768 | approx £7,680 |
| Zero Deposit | £0 | £48,000 | 8.5% | approx £986 | approx £11,160 |
The zero deposit option costs approximately £3,480 more over the term in additional interest, with £218/month higher payments. The £9,600 saved upfront can generate far more than £3,480 if deployed in the business - or it may be that simply not having the cash makes the deal possible at all.