How Much Deposit Do I Need for Asset Finance?

The typical deposit range

Most asset finance requires a deposit of 10-20% of the asset's value. This is not a fixed rule - it varies by asset type, lender, business profile, and the specific application. Understanding what drives the deposit requirement helps you plan and negotiate effectively.

Deposit by asset type

Commercial vehicles (HGVs, vans): 10-15%. Well-understood assets with strong secondary markets - lenders are comfortable at the lower end.
Construction plant (excavators, telehandlers): 10-20%. Varies with asset age and condition. New plant from major manufacturers attracts the lowest deposits.
Agricultural machinery: 10-20%. Seasonal income structures sometimes require a higher initial payment to establish the pattern.
Cranes and specialist lifting: 15-25%. High-value specialist assets with more limited secondary markets require slightly larger deposits.
Marine (yachts, commercial vessels): 20-30%. Marine assets have more variable values - lenders compensate with higher deposits.
Aviation: 20-30%. Similar to marine - specialist assets requiring specialist valuers and more conservative advance rates.

What reduces the deposit required

Strong business trading history: An established business with 3+ years of profitable trading can often access lower deposits than a newer business.
Previous asset finance: A track record of successfully servicing asset finance demonstrates reliability - some lenders reduce deposit requirements for returning customers.
Primary relationship: If you have a primary banking or finance relationship with a specific lender, they may offer lower deposits as part of the overall relationship.
New assets from major manufacturers: A brand-new Caterpillar excavator or Volvo HGV commands a lower deposit than an older used machine - the residual value risk is lower.

What increases the deposit required

New business or limited trading history: Start-up and young businesses typically need to put down more to compensate the lender for less track record.

Old or high-hour assets: A 15-year-old excavator with 15,000 hours has more residual value risk than a 3-year-old machine - the lender's cushion needs to be larger.

Specialist or niche assets: Assets with limited secondary markets - highly customised equipment, unusual specifications - attract higher deposits.
Weaker credit profile: A business with adverse credit history or limited financial information typically pays a higher deposit.

Zero deposit options

Zero-deposit asset finance exists for specific situations - new assets from manufacturers whose financial services arms compete aggressively for business (some van and truck manufacturers offer zero-deposit deals). However, zero-deposit finance is uncommon outside of manufacturer promotions and typically comes with higher interest rates.

For most business asset purchases, a 10-15% deposit is the right expectation to plan around.

The five things to remember

Most asset finance needs a deposit of 10-20% of the asset value, but the figure moves with asset type, lender, and business profile.

Commercial vehicles and construction plant sit at the lower end; marine and aviation typically need 20-30%.

Trading history, previous asset finance, and a new asset from a major manufacturer all pull the deposit down.

A new business, an old or high-hour asset, a niche machine, or adverse credit all push the deposit up.

Zero-deposit deals exist, mostly through manufacturer finance arms, but usually carry a higher rate - plan around 10-15%.

Frequently asked questions

Can I include the deposit in the finance?

No - the deposit is your equity contribution and cannot be borrowed as part of the same asset finance facility. However, a separate business loan or sale-leaseback of another asset can provide the deposit funds.

Can I use an existing asset as part payment instead of a cash deposit?

In some cases - if you are part-exchanging an existing asset with the dealer, the part-exchange value can reduce the amount being financed. This effectively functions like a higher deposit.

Does the deposit earn interest or capital appreciation?

No - the deposit is paid to the finance company as part of the asset purchase. It is not held in a savings account. It reduces the amount of finance required and therefore your monthly payments and total interest cost.

What happens to my deposit if the business fails during the finance term?

The deposit is not returned. The finance company retains the asset and recovers their balance from it. Ensuring you have appropriate personal guarantee and insurance arrangements in place protects you from personal liability beyond the deposit.

Can I negotiate the deposit down?

Yes - particularly for fleet purchases or for businesses with strong trading profiles. We negotiate with lenders on your behalf and often secure better terms than a direct application would achieve.