Is asset finance available with no deposit?
Nil-deposit agreements exist and are common on the right asset with the right credit profile — but they are not universal, and they cost more overall. Here is the honest picture.
- Nil-deposit structures available on qualifying deals
- Typically needs a strong credit profile and a mainstream asset
- VAT-only deposit is often the practical middle ground
- We show total cost, not just the monthly figure
Yes, no-deposit asset finance genuinely exists. Whether it is available to you depends on three things: your credit profile, the asset, and the lender’s appetite at the time.
A nil-deposit agreement means the lender is financing the full purchase price and therefore carrying the maximum possible exposure from day one. Lenders are most comfortable doing that when the asset holds its value well and has a liquid second-hand market — mainstream commercial vehicles, established machinery brands, standard plant. They are least comfortable with bespoke, imported or fast-depreciating assets.
It is worth being clear about the trade-off. Financing 100% of the cost means borrowing more, which means paying more interest across the term, and it may attract a higher rate as well. A no-deposit deal preserves your working capital, which can be exactly the right call — but it is not cheaper. We will show you both structures side by side so the choice is made on real numbers.
When a deposit is usually required
- Adverse credit. A deposit reduces lender exposure and is often what makes a marginal deal viable.
- New businesses. With no trading record, a deposit demonstrates commitment and lowers risk.
- Specialist or bespoke assets. Harder to resell, so lenders want a lower loan-to-value from the outset.
- Older or high-mileage assets. Faster depreciation means the lender’s security erodes more quickly.
- Private-sale or auction purchases. Valuation is harder to verify, so lenders typically want more margin.
The VAT-only middle ground
A common and practical structure is to finance the net cost of the asset while you pay the VAT element up front. On a £50,000 machine that means finding £10,000 rather than nothing or a full deposit.
This works well for VAT-registered businesses because the VAT is usually reclaimable on the next return, so the money comes back relatively quickly. It gives the lender a lower loan-to-value than a full nil-deposit deal, which can widen the range of funders willing to look at it and improve the rate. If a straight no-deposit deal is not available, this is often the next best structure to explore.
Common questions
Is asset finance available with no deposit in the UK?
Yes, nil-deposit asset finance is available, though not on every deal. Lenders are most willing to fund 100% of the cost where the applicant has a solid credit profile and the asset is mainstream with a strong resale market — standard commercial vehicles and established machinery brands, for example. Adverse credit, a new business, or a specialist asset will usually mean a deposit is required. All finance is subject to status, affordability and lender approval.
Does a no-deposit agreement cost more?
Overall, yes. You are borrowing the full purchase price rather than part of it, so you pay interest on a larger balance across the term, and nil-deposit deals sometimes carry a higher rate because the lender’s exposure is greater. The benefit is that your working capital stays in the business. Whether that trade is worth it depends on what else that cash could be doing.
What is a VAT-only deposit?
A structure where the finance covers the net cost of the asset and you pay the VAT element up front — £10,000 on a £50,000 machine. For VAT-registered businesses the VAT is generally reclaimable on the next return, so the outlay is short-lived. It gives the lender a lower loan-to-value than a full nil-deposit deal, which can improve both availability and rate.
Can I use a part-exchange instead of a cash deposit?
Often, yes. An asset you already own outright can frequently serve as the deposit, with its trade value applied against the purchase. This is common with vehicles and plant. The lender will want the part-exchange value evidenced.
How much deposit do lenders usually ask for?
It varies widely by asset, credit profile and lender, so any single figure would be misleading. What we can do is tell you, before anything is submitted, what structures are realistically available for your particular deal.
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CW Asset Finance is a credit broker, not a lender, and may receive a commission from the lender that funds your agreement. All finance is subject to status, affordability and lender approval. Nothing on this page is a quote or an offer of finance, and no outcome is guaranteed. CW Asset Finance is an Appointed Representative of Rural Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630701). Tax treatment depends on individual circumstances and may change — take advice from your accountant.