Hire Purchase Rates September 2026 — Business Asset Finance by Asset Class
- Business HP rate APR range — by asset class and profile (September 2026)
- 5.5%–9.5%Business HP rate APR range — by asset class and profile (September 2026)
- Capital allowances claimable from year 1 on HP — tax advantage over leasing
- Year 1Capital allowances claimable from year 1 on HP — tax advantage over leasing
- Typical HP term — aligned to asset useful life
- 1–7 yearsTypical HP term — aligned to asset useful life
- HP: business owns asset at end of term — key difference from leasing
- OwnershipHP: business owns asset at end of term — key difference from leasing
Business hire purchase rates in September 2026 range from 5.5% to 9.5% APR depending on asset type, loan size, business credit profile, and term. HP is the most common business asset finance structure for plant and machinery, commercial vehicles, and technology — the business makes fixed monthly payments, and ownership transfers at the end of the term. Capital allowances can be claimed from year 1 for tax purposes. DBF accesses a whole-of-market asset finance panel for business HP across all asset classes.
Hire Purchase Rates by Asset Class — September 2026
Swipe the table sideways to see every column.
| Asset class | Rate APR | Typical term | Deposit | Capital allowances | Notes |
|---|---|---|---|---|---|
| Agricultural machinery | 4.5%–7.0% | 3–7 years | 10%–20% | Full AIA (up to £1m/year) | Hard asset, strong residual values. Good lender appetite. |
| Construction plant / excavators | 5.0%–7.5% | 3–7 years | 10%–20% | Full AIA | Strong collateral. Many specialist construction lenders. |
| Commercial vehicles (HGV, LCV) | 5.5%–7.5% | 3–5 years | 10%–15% | Full AIA or WDA 18% | Age restrictions: typically under 10 years at end of term. |
| CNC / precision machinery | 6.0%–8.5% | 3–7 years | 15%–25% | Full AIA | Specialist knowledge required. Asset must be individually identifiable. |
| Technology / IT equipment | 6.5%–9.5% | 2–5 years | 10%–20% | AIA or WDA 18% | High depreciation risk. Shorter terms preferred. Some lenders decline. |
| Medical / dental equipment | 5.5%–7.5% | 3–7 years | 10%–20% | AIA | Strong lender appetite. Regulated sector — good covenant. |
| Office fit-out / furniture | 7.0%–9.5% | 3–5 years | 15%–25% | AIA | Soft asset. Lower residual. Higher rate. |
| Crane and lifting equipment | 5.0%–7.0% | 5–10 years | 15%–25% | AIA | Specialist asset — see Crane Finance Rates guide. |
What determines your rate
HP vs finance lease — the tax and ownership decision
Hire purchase: business claims capital allowances from year 1 (Annual Investment Allowance up to £1m/year, then Writing Down Allowance at 18% or 6%). Title transfers at end of term. Finance lease: no AIA (lease payments are revenue deductible). Off-balance-sheet under some accounting standards (IFRS 16 brought many leases on-balance-sheet). No ownership at term end — option to extend or hand back. The tax treatment difference means HP is often better for profitable businesses claiming AIA; finance lease can be better for businesses seeking revenue deductibility or off-balance-sheet treatment.
Deposit size and its impact on rate
The deposit (or down payment) directly affects the loan-to-value for the HP facility and influences the rate. Most HP lenders require 10%–25% deposit depending on asset class. Harder assets (agricultural machinery, construction plant) with strong residual values accept lower deposits (10%) and offer lower rates. Softer assets (technology, office equipment) require higher deposits (20%–25%) and carry higher rates due to faster depreciation. DBF advises on the optimal deposit level to minimise the total cost of the HP facility.
Asset age at end of term — the practical limit
Most HP lenders cap the maximum age of the asset at the end of the finance term — typically 10–15 years for plant and machinery, 10 years for commercial vehicles, and shorter for technology. A used asset must be assessed against this limit: a 7-year-old excavator can be financed on a 5-year HP term (12 years total) but not a 7-year term (14 years, potentially beyond the limit). DBF checks the end-of-term age for every used asset before approaching lenders.
Business credit profile and rate impact
Business HP lenders assess the business credit file (filed accounts, CCJs, payment defaults), director personal credit, and trading history. Businesses with clean credit and 3+ years trading access the best rates. New businesses (under 2 years) face a smaller lender panel and may require director personal guarantee and additional deposit. Businesses with adverse credit can access specialist lenders at higher rates. DBF presents a balanced picture of the business's creditworthiness before approaching lenders — managing expectations and targeting the most appropriate panel.
Worked cost example
- Agricultural HP (specialist lender via DBF)
- 5.2% APR over 5 years
- Net cost of tractor after tax benefit
- £125,000 - £31,250 = £93,750
- At 25% tax rate
- £1,850 × 25% = £462.50/month tax saving
Agricultural machinery: John Deere 6130R tractor, 2023. Trade price: £125,000.
Farm business, 8 years trading. Clean credit. 15% deposit: £18,750. Finance: £106,250.
Monthly payment: £2,009. Total interest: £14,290. Total cost: £120,540.
Capital allowance benefit: AIA on £125,000 at 25% tax rate = £31,250 year 1 tax saving.
Net HP cost after tax (HP interest partially deductible): approximately £107,000 total.
Alternative — finance lease (off-balance-sheet, revenue deductible)
Monthly: £1,850. No AIA. Revenue deduction on full lease payment.
Net monthly cost: £1,388. HP net monthly: £1,580 (after AIA amortised over 5yr).
Finance lease slightly cheaper net monthly — but no ownership at term end.
DBF recommendation: HP for farm with long-term equipment ownership intent. Finance lease if regularly replacing.
Rate context and outlook
The Bank of England held its base rate at 3.75% on 30 July 2026 in a divided 6-3 vote. Next decision: 17 September 2026. DBF arranges business HP across all major asset classes through a whole-of-market panel of 50+ asset finance lenders. Our asset finance team knows which lenders have the strongest appetite for each asset class, and which are most competitive for each business profile. DBF also advises on the HP vs finance lease comparison for each specific case — the right structure depends on the business's tax position, accounting treatment preference, and long-term equipment intentions.
Frequently asked questions
What are business hire purchase rates in September 2026?
Business HP rates range from 4.5%–7.0% APR for agricultural machinery and construction plant, to 7.0%–9.5% for technology and office fit-out. The rate depends on asset class (hardness of collateral), business credit profile, deposit, and term. DBF models the rate for your specific asset and profile before approaching lenders.
What is the difference between HP and finance lease for businesses?
HP: business owns the asset at the end of the term and can claim capital allowances (AIA up to £1m/year) from year 1. Finance lease: lease payments are revenue-deductible but no ownership and no AIA. HP is typically better for profitable businesses claiming AIA; finance lease can be better for businesses prioritising revenue deductibility or off-balance-sheet accounting treatment.
Can I get HP on used equipment?
Yes — most asset HP lenders accept used equipment subject to the asset's age at the end of the term (typically maximum 10–15 years for most asset classes). A surveyor's condition report or inspection may be required for high-value or older used assets. DBF checks the end-of-term age for every used asset enquiry.
Do I need a deposit for business HP?
Most HP lenders require a deposit of 10%–25% depending on the asset class. Harder assets (agricultural machinery, construction plant) typically accept lower deposits (10%). Softer assets (technology, office fit-out) require higher deposits (20%–25%). A larger deposit reduces the loan amount and can improve the rate.
Can a new business get HP finance?
Yes — but the lender panel is more restricted. New businesses (under 2 years trading) may be required to provide director personal guarantee, a larger deposit (20%–30%), or may face higher rates. Some specialist start-up and new business asset finance lenders will consider applications with less than 12 months trading history, particularly where the director has relevant industry experience. DBF advises on the best route for new businesses.
Get a personalised rate comparison for your case
Independent whole-of-market advice · FCA No. 814533