Steps to Take as a Start Up to Secure Finance

As inflation continues to rise, securing finance is a crucial step for any start-up looking to grow and thrive in today’s competitive business landscape. Funding is often the make or break for a new company as it acts as its lifeblood, enabling it to fuel its operations, invest in research and development, and scale the business.

However, securing finance can be a daunting task for entrepreneurs who have had little exposure to the task, so we have compiled steps you can take to increase your chances of securing finance and put your business on the right track.

Step 1: Define your Equipment Needs and Rationale

Before seeking finance, it is crucial to have a clear understanding of what your start-up actually needs the finance for. Begin by clearly outlining the equipment you require and the rationale behind each purchase. Highlight how the equipment will enhance operational efficiency, increase output, or allow you to take on larger projects. This rationale establishes a strong foundation for securing asset finance.

Step 2: Showcase Industry Expertise

Evident industry experience plays a pivotal role in gaining asset finance approval. Lenders are more likely to provide financing if you can showcase a track record of successful projects in the construction sector. Highlight some of your completed projects and emphasise your team’s expertise. This evidence demonstrates your capability to leverage the equipment effectively.

Although you may not have a lot of industry experience as a start-up, lenders will appreciate any sort of successfully completed projects, or projects that are in progress but forecasted to be successfully completed in the future. Lenders will also take a view on prior industry experience.

Step 3: Demonstrate Repayment Ability

Lenders assessing asset finance applications want assurance that their investment will be repaid. To instil confidence, showcase your construction business’s financial health, revenue streams, and projections as best as you can.

Step 4: Pick the Right Finance Option for you

Select the most appropriate financing option based on your construction business’s needs. Hire Purchase and Finance Lease are the two most popular options. Hire Purchase allows you to spread the cost over time while eventually gaining ownership, while Finance Lease provides flexibility and potential tax benefits. Assess each option’s impact on your financials and choose the one that aligns with your long-term goals.

Learn more about each option here.

Step 5: The Smarter Option

As a financial broker, we understand that these steps can be overwhelming, as each step takes a lot of thought, time, and even finances. We take the stress off your shoulders by working with you to gather all the relevant details required to get an application submitted, then utilise our list of over 70 lenders to get you the best possible deal out there in as short a timeframe as possible; we have secured numerous deals in as little as 10 minutes! Applications are subject to status and approval.

We have worked with hundreds of clients, many of which have come back for more due to the quality of service and the deals we are able to secure. Just take a look at our Trustpilot reviews to get an insight into how we work. Get in touch with us today to see how we can help, no strings attached.

6 Ways to Navigate Rising Interest Rates for Asset Finance

This year has seen record breaking interest rate rises, with the Bank of England announcing thirteen base rate increases in a row. This can make asset financing a difficult task, so companies must adapt their financial strategies to the changing environment.

Although the general view on rising interest rates is negative, there can be benefits when teamed with smart financial decision-making.

We’ve collated six essential ways to navigate rising interest rates when looking for asset finance options to help you stay ahead and make better decisions.

Monitor and forecast interest rate trends

There is currently an apparent upward trend in interest rates with a record breaking 13 rises in a row. However, it is bound to stabilise and come back down at some point.

The Monetary Policy Committee regularly meet to discuss interest rates, uploading summaries of discussions and what they assume for the future here. Make sure to keep up with what has been discussed and look into the opinions of news outlets and financial experts to give yourself the best chance of making an accurate forecast.

Being able to make an accurate forecast will give you the power to make a more informed financial decision and avoid any negative surprises.

Refine your financing strategy

How you refine your financing strategy will come down to what your strategy is, but some general points that will help you are:

  1. Alternative financing options: Certain financing options can provide far more stability in a time of rising interest rates, such as fixed rate loans. A fixed rate contract will ensure that rising interest rates will not impact the amount of interest you pay on your loan, as the interest legally cannot change until the end of the contracted period.
  2. Longer-term contracts: Although long term contracts come with a slightly higher interest rate, they are generally locked in and done in a fixed rate style, so interest fluctuations will not affect your payments. This approach can be especially useful when financing assets that have longer lifecycles, as the loan term is more aligned.
  3. Refinancing opportunities: If you can predict that interest rates are likely to continue rising, refinancing before interest rates rise any further can be a strategic move. This can be a cost-effective way of raising cash for your business.

Improve your financial position

Try to take measures to improve your financial position, such as strengthening your creditworthiness with a better credit score, reducing outstanding debt as much as possible, improving your cash flow management etc. Even in a high interest environment, lenders will be far more inclined to give you favourable loan terms with a healthier financial position as well as providing you with more power to negotiate those terms. We work with several companies who will assist in assessing and improving your credit score – contact us to find out more.

Assess your overpayment options

Overpayments are an effective way to tackle the challenges of rising interest rates. It is worth checking with your lender about the ability to make overpayments at any point during the contract’s duration. This enables the borrower to reduce the principal amount and consequently reduce the impact of higher interest rates.

Certain lenders go a step further by permitting a full early repayment without any significant settlement penalties. This provides greater financial manoeuvrability and can be extremely beneficial in a time of high interest inflation.

Optimise your asset selection

Focus on the most critical assets that will provide the highest long-term value with steady returns. As you will be paying more on interest, countering it by maximising your return on investment (ROI) per asset is important.

Once you have determined which assets will provide lower returns and are less necessary, wait until interest rates reduce to make sure that you are profiting from all your asset investments while only purchasing what you really need at that time.

Communicate with your lenders

Building and maintaining strong relationships with lenders is essential. Stay in regular contact with your lenders, keeping them informed about your financial performance and discussing any potential adjustments or refinancing options that could be favourable. Open communication fosters transparency and allows you to explore mutually beneficial solutions that can help navigate the impact of rising rates effectively.

By implementing these strategies, you will be able to navigate the financial landscape with more confidence. At Full Metal Finance, we understand the intricacies of asset finance in a dynamic market. We tailor our comprehensive range of financial services to your needs and help you to get the best possible deal from our list of over 70 lenders. Just take a look at what other people are saying about us to get an indication as to why we are right for you.

Don’t wait any longer, take control of your asset finance journey with FMF; get in touch with us today.


Annual Percentage Rate (APR)

APR, or Annual Percentage Rate, is a percentage term that represents the annual cost of borrowing money, including the interest rate and any additional fees or charges associated with the loan.

Appraisal in Construction

An appraisal is the process of determining the value or worth of a property, asset, or item, generally done by a professional appraiser.

For example, if you want to buy a second-hand excavator, you can expect an appraisal to be done so the seller can price it accurately.

Asset Finance

Asset finance is a financial agreement between a company/individual and a financial institution/leasing company, whereby an asset is initially paid for by the financial institution/leasing company and the company/individual then makes regular payments to them over a specified period.

There are three main types of asset finance: Hire purchase, finance lease and operating lease.

Balloon Payment

A balloon payment is a lump-sum payment due at the end of a loan term or lease agreement.

The term “Balloon” comes from the significantly larger payment than the regular periodic payments made throughout the loan/lease period.

Business Financing

Business financing refers to the many methods and sources of obtaining funds to support the operations, growth, and investments of a business.

Some examples of these methods would be: Cashflow funding, invoice financing, and refinancing.

Cashflow Funding

Cashflow funding (or cashflow financing/lending) is a method of financing focusing on a business’ ability to generate cash flow, rather than relying solely on its assets as collateral.

It provides short-term capital based on expected future cash flow of the business.

Construction Finance

The specialised financial arrangements used to fund construction activities, such as infrastructure, construction equipment, or other construction related expenses.

There are many methods gaining construction finance, visit our products page to see what we can offer:

Contract Hire

Contract hire is a method of renting a vehicle for a fixed period under a contractual agreement. It is a popular option for companies and individuals that don’t want to commit long term to the ownership of a vehicle.


Demolition is the process of safely and systematically dismantling or demolishing existing structures, buildings, or infrastructure. It is generally conducted to make way for a new construction, renovation, or land development.

Down Payment

A down payment is a payment made upfront by a buyer as part of a larger purchase or financing agreement. It is usually calculated as a percentage of the total purchase price/loan amount.

Finance Lease

A finance lease refers to a long-term lease agreement allowing a company to acquire and use an asset for a significant portion of its useful life. At the end of the lease term, the lessee will return the asset to the lessor or pay a peppercorn rental to retain use of the asset.

Hire Purchase

Hire purchase is a type of financing arrangement that allows an individual or business to acquire an asset through an instalment payment plan. The buyer takes immediate possession of the asset while paying for it in instalments over a specified period. The ownership of the asset is transferred to the buyer once all the payments, including any interest or fees, are completed.

Invoice Financing

Invoice financing is a financial arrangement whereby a business uses its outstanding customer invoices as collateral to obtain immediate cash flow. These invoices are generally sold to third-party finance companies at a discounted rate.

Loan term

A loan term refers to the length of time over which a loan agreement is structured to be repaid.


Refinancing is the process of releasing the equity from assets you own outright (or have more than 50% ownership), structured on a hire purchase or finance lease basis.

Refinancing can also replace an existing loan or debt obligation with a new loan that has different terms and conditions (generally more favourable).

Secure Loan

A secure loan is one that is backed by collateral (an asset pledged by the borrower to the lender as security). The collateral acts a security in the case that the borrower fails to repay the loan.

Unsecure Loan

An unsecured loan is a type of loan that is not backed by collateral or assets. Unlike secured loans, unsecured loans are granted based on the borrower’s creditworthiness, income, and ability to repay, rather than requiring the borrower to pledge specific assets as security.

Vehicle Finance

Vehicle finance refers to the various financing options available to individuals or businesses to purchase or lease vehicles. It provides a way for people to acquire a vehicle without paying the full purchase price upfront. Vehicle finance can be obtained through banks, financial institutions, or automotive dealerships.

What is a Construction Equipment Finance Broker?

Construction equipment brokers don’t half make things complicated sometimes. Whether it’s high rates or unnecessary paperwork, you can work your fingers to the bone by simply signing up. That frustration is the reason Full Metal Finance was born, offering clear, valuable and effective services to our clients. Our motto? ‘If it leaks oil – we’ll fund it’. 

First things first, a construction equipment finance broker assists companies with finding the right finance deals that enable them to purchase or hire equipment. For Full Metal Finance, this extends to business loans, director’s cars, invoice financing and cashflow funding.

Going straight to the bank for loans can prove slow and awkward, but using a finance broker opens up your opportunities to more lenders and, more often than not, better deals. 

To help you get to grips with how construction equipment finance brokers operate and what you need to look out for, we’ve gathered a quick list with all the information you’ll need.

Complete market access

Without complete market access, you’re going to be left in the mud. As one of the UK’s fastest-growing independent finance providers, Full Metal Finance has got full access to a wide range of markets, not just tied to your bank. Whether you’re searching for diggers and dumpers or cars and commercial vehicles, we’ve got your back. Essentially, we have full market access for any piece of metal machinery you’re after.

Terms that suit you

When searching for a construction equipment finance broker, the terms should always suit you. Here at Full Metal Finance, we explore other ways of financing deals, including VAT deferrals, seasonal payments and NIL deposits. Tunnel vision is never good when operating as a broker – that’s why we remain versatile when financing deals.

Private or dealer sales

Versatility is the name of the game if you’re going to be a valuable construction equipment finance broker. Thankfully, that isn’t a problem for us. We have and continue to work with some of the biggest manufacturers in the UK, including Doosan, Bobcat and Avant, among many others. These relationships run deep and are built on solid foundations. Private or dealer sales, we’ve got your back.

Transparent costs of finance

When supplying any kind of financial service, transparency should always be on the table. Working with Full Metal Finance means transparency is vital – it’s a part of who we are and plays a crucial role in all our offerings. You always have complete access to finances without any hidden fees, so you can plan ahead and stay in full control.

Value your time

We’re not here to build a house of cards. An equipment finance broker should do the heavy lifting for you with the value of your time in mind. When working with Full Metal Finance, accessibility and simple processes take up as little of your time as possible, providing clear and fuss-free applications. We always put the pedal to the metal when processing deals without sacrificing quality.

Trusted and 5* reviewed

Without trust, we’re nothing. When looking for a broker, digging deep into their history and reviews should be key. Our 25 years of experience and trust within the industry have helped make our business what it is, offering construction companies opportunities to build from the ground up. Ultimately, we let our reviews and feedback do the talking – take a look at our Trustpilot to see for yourself.

Negotiation on your behalf

Negotiation is a key part of any construction equipment finance broker. Thankfully, we’ve got negotiation experience in the bucket loads (25 years, to be precise). Our detailed knowledge of the industry allows us to make the best decisions possible in your interests, taking quality and value into account. After all, we wouldn’t be where we are today without great negotiation skills.

Building the foundations for your business for the future is what Full Metal Finance is all about. We’re in this for the long term. Interested in collaborating? Let’s get started. Get in touch with Full Metal Finance through our contacts page today to talk to one of our dedicated professionals.

Paving The Way For Emission-Free Machinery

With industry leaders around the world congregating at COP27 this week to tackle the climate emergency – expectations are high for the construction sector. The industry is responsible for a quarter of the UK’s greenhouse-gas emissions and although construction industry leaders have made great strides on the operational front in recent years, the Government is stepping in to provide guidance. By creating concrete plans to help slash emissions, it allows the sector to shoulder part of the risks and opportunities associated with decarbonizing the built environment.

Electrification of construction machinery

The electrification of construction machinery is making quick progress and low-emission driving, and working, is currently one of the main development goals of the construction machinery industry, with an international focus on battery-electric drives.

Last year saw a whole range of new products reaching the market, such as Volvo Construction Equipment (Volvo CE) accepting orders for its ECR25 Electric compact excavator and L25 Electric wheel loader. The first of the machines offered in 13 countries have already been delivered to end customers.

5 zero-emission machines you should know about

Manufacturers are continuing to provide the sector with zero-emission vehicles and sustainable solutions. Here are five pieces of zero-emission equipment that construction contractors should know about.

1. Hitachi ZX55U-6EB mini excavator

The Hitachi Construction Machinery (Europe) ZX55U-6EB micro excavator is a 5-tonne battery-powered machine that is the company’s first for the European market.

The machine is powered by lithium-ion batteries and may be linked to a CEE 400VAC 3-phase power source, allowing it to work while charging. A communication terminal allows owners to monitor battery charging status, machine location information, and electric system problems, which helps to lower life-cycle costs. The ZX55U-6EB also has lower noise levels, more efficiency, fewer maintenance requirements, and less downtime than standard models.

2. Junttan PMx2e battery-powered rig

collaboration with Danfoss, is claimed as a global first. The rig has a maximum pile length of 20 metres and two replaceable 396kWh battery packs.  The battery pack is positioned at the rear of the rig and is said to be as powerful as normal Junttan diesel-powered rigs.

PMx2e produces zero emissions and uses less energy per pile. The equipment, which is powered by a battery pack and controlled by an Editron electric motor, is thought to emit less noise pollution than a diesel-driven rig. 

3. Volvo EC230 crawler excavator

The 22-tonne EC230 is Volvo CE’s first electric zero-local-emissions crawler excavator, developed in China. The machine is powered by four 66kW lithium-ion batteries that can last up to eight hours, and it is based on the diesel-powered EC220E. It is fully compatible with a Combo2-Plug, a global standard combination DC charging solution for electric vehicles up to 500kW.

4. Wacker Neuson DT10e track dumper 

With a payload of 1,000kg and a fully electrical engine, the DT10e track dumper by Wacker Neuson is said to be ideal for indoor projects. Like the EC230, its battery lasts up to eight hours when fully charged. The company say that under maximum load, the battery lasts for 3.5 hours. The machine has three electric motors, two for the engine which perform at 2kW and one for the gear pump drive system.

5. JCB 525-60E compact telehandler

The 525-60E compact telehandler from JCB is available as part of the company’s electric E-TECH range. The 2.5-tonne machine, which has been redesigned from the diesel predecessor, has a 2,500kg lifting capacity, a maximum lift height of 6m, and is said to reduce noise and environmental effect. It is outfitted with a 24kWh lithium-ion battery from Jungheinrich, which can be fully charged in eight hours using a 3kW on-board charger.

Manufacturers are under pressure

Sustainability, like in other businesses, has risen to the top of the agenda. Manufacturers are under increasing pressure from investors, regulators, customers, and even their own employees to improve their sustainability performance, specifically by lowering carbon emissions and paying more attention to product circularity.

If you’re looking to invest in electric fleet for your business, Full Metal Finance can help.  We have a variety of finance solutions available, from refinancing existing machinery, to securing a fixed rate hire purchase agreement.  Whatever your circumstances, we’re a full-service broker focusing on an industry surrounded by metal. 

We are also accredited to offer the Government-backed business finance scheme which was launched to support the UK’s small-to-medium businesses with financial support due to the impact of COVID-19.  You can borrow up to £2m which is available as a cash loan for new asset purchases or refinancing existing assets, over a 1 -6 year term.

Get in touch with one of our team today.

Our Tips On How To Manage Your Cash Flow In 2023 And Avoid 2022’s Mistakes

When it comes to cash flow, the positives and negatives aren’t rocket science. Bad cash flow means you may not get the best rate of interest available, while excellent cash flow opens more finance options so you can invest in growing your business. It really is as simple as that, but the question remains – how can you efficiently enhance your cash flow?

Well – you’re in luck. In this article, we’ve put together some of our top tips in answer to that very question. Have a peek at our favourites below to help level up your business, while avoiding last year’s stumbling blocks in the process:

Dig deep to find the best finance options

All good things come to those who dig. The best finance options for your business aren’t always going to be staring you in the face. Sometimes spending that extra time researching can make a world of difference and positively impact your cash flow in the long term. Full Metal Finance, if we do say so ourselves, would be a great option in regards to finding those stellar finance options. We think outside the box, are dedicated to building credit and prioritise open and transparent communication with all our clients.

Spread the costs

Financing purchases is a terrific way to spread out the costs of your equipment while saving money for investing and day-to-day operations. It’s important to remember that you’ll still be responsible for interest charges but, as long as they are not unnecessarily steep, it’s still the perfect option for most companies. In fact, you may even be able to write off charges such as interest within your business expenses. A win-win.

Start team training on Cash Flow Management

Learning and Development (L&D) can get a bad rap for being a bit of a waste of time. However, we’re firm believers that it can make a big difference to company expertise and could be just what you’re looking for when developing new ideas for enhancing cash flow. Teaching your staff using external sources or organising group meetings with an expert within your own organisation will supply you with extra resources for improving operations. Before you know it, new ways to improve your cash flow will start popping up like daisies.

Trust us – if you can get everybody singing from the same hymn sheet, you’ll be on the path to success.

Don’t let Outstanding Day Sales slip by

This one might sound obvious, but many construction companies don’t realise just how impactful being paid late can be. On average, it takes between 60-90 days to get paid, which can negatively hit your cash flow (especially when this is done en masse). The solution? Be stringent with your clients before starting a project and make it a company goal to lower the number of days to receive invoices to 45 or under. Adapting payment methods for different customers could also be extremely beneficial.

Great accountants are lifesavers

What would the world be like without accountants? A lot more chaotic – that’s for sure. Great accountants can be the difference between positive and negative cash flow for your business. A tip-top accountant will have the ability to keep things ordered and organised (an essential trait) while having a deep well of knowledge about the construction industry to tap into. With ongoing changes to legislation within the industry, this could be crucial. A stellar accountant is an essential cog in a well-oiled machine, optimising and streamlining your cash flow.

Managing your cash flow effectively isn’t just useful, it’s potentially transformative. If you’re searching for help sourcing the best finance option for you, it’s time to get in touch with Full Metal Finance – we’re only a phone call away.

Construction 2025- What Does It Mean?

In 2013, the HM Government published the ‘Construction 2025’ report, laying out plans and goals for the UK construction industry to achieve by 2025. It’s a 78-page report that goes into every detail of the 12-year plan. Sound interesting?

It may not sound like the most enthusiastic read, but luckily, we’re all mad about construction at Full Metal Finance, so we’ve analysed and condensed it into a digestible article just for you.

What are the goals and plans?

The report details five areas of development that would benefit the construction industry the most, those being:


This plan will come from two areas. The first is to change the industry’s perception in the public eye, as it currently has the reputation of being lazy and slow.

The second is to improve our British construction labour force through training and creating higher standards. These points work hand in hand, as more skilled labour will create a better reputation, and a better reputation will bring in more competent workers. The government believes a reasonable goal is to lower the average time to complete a construction project by 50%.

Smart (Technology)

‘Smart,’ or technology, is self-explanatory. The government plans to invest more in research and development to create a more efficient and advanced industry. The report notes that the goal is to reduce the overall cost of construction by 33%.


Sustainable construction will emerge from the use of greener materials and processes. Innovation is vital for this to happen. So, the sustainability plan relies heavily on the ‘smart’ plan. The government’s goal for sustainability is to reduce construction-related greenhouse gas emissions by 50%.


Growth is an ambiguous term. In this case, the report refers to both the growth of the UK macroeconomy, through more exports and fewer imports, and that of the local economy to overcome the challenges from the forecasted rise in population (water, transport, power, etc.).

The goal here is a 50% cutback in the 2013 trade gap (the gap between the number of imports versus exports).


The leadership plan is in place to help implement these goals, working with the Construction Leadership Council (CLC) to achieve the four goals above.

Are we on track?

In short, no. This comes down to several factors:

– It’s the UK. The government has been setting construction goals like this since 1934 at the Construction Industry Reports with little success.

– Climate change fears have been rising, with the Climate Change Act now being taken more seriously. The act looks to achieve a carbon net zero by 2050, so governments are dedicating more of their attention to achieving this while forgetting about previous goals.

– The COVID-19 outbreak brought the UK economy (and almost all economies) to a standstill. Covid caused a setback for all of the UK’s objectives, not just Construction 2025’s.

 Hope is not all lost!

Robotics and Artificial Intelligence are predicted to become some of the most dominant tools in construction soon. It is still unknown whether that is before 2025, but it will happen. With the help of these tools, the construction industry will not only be able to meet the goals set in Construction 2025 but may improve way beyond our wildest imaginations.

What does this mean for you?

Technological advancements can be pretty intimidating, especially as they can change an entire industry overnight (precisely what happened when smartphones came into the world). What we have seen is companies that have money, or are at least willing to spend it to stay competitive, are the ones that survive.

At Full Metal Finance, we’re here to take some of that stress off your shoulders. New technology can be costly to pay in full, so we’ve pledged to keep up with the industry’s technological changes and provide affordable financial solutions.

But why wait? Prepare your company for these future changes by building your enterprise now. Get in touch with us today to see how we can help you build your dream.

Schemes To Help Contractors Adjust To The Red Diesel Ban Gain Funding

In recent years, there has been an increasing focus on reducing carbon emissions and addressing climate change, especially with the implementation of the UN Paris agreement in 2015, whereby all parties should achieve net zero carbon emissions by 2050. As a result, the UK government has created various policies and initiatives to achieve these goals, including the recent ban on red diesel, which came into effect in April 2021.

What is Red Diesel?

Red diesel is used in non-road vehicles and machinery, such as tractors and construction equipment. Named for its distinctive red colour, which comes from a red dye added to regular white diesel to differentiate it, the use of red diesel has traditionally been allowed due to a lower tax rate.

The red diesel ban means businesses using non-road vehicles and machinery must now switch to using white diesel, which is taxed far more. This change will significantly impact contractors and construction companies, as they rely heavily on non-road vehicles and machinery to carry out their work.

What is being done to help?

To help businesses adjust to the red diesel ban, the UK government has announced various schemes to provide financial support and assistance. These schemes are designed to help companies to transition to white diesel and invest in more environmentally friendly equipment and machinery. Some examples include:

Red Diesel Replacement Competition

One of the primary schemes is the Red Diesel Replacement Competition. It is a government led competition rewarding the applicants with the best red diesel replacement projects. There have been two phases of this, with the first phase providing £6.7 million of funding for 17 different projects, most of which are based on sourcing hydrogen-based fuel alternatives.

The second phase began at the start of 2023, with a larger funding pot of £32.5 million. Funding applications are now open, so if you have any off-road green alternative projects underway, follow the application process here.

Green Recovery Challenge Fund

The Green Recovery Challenge Fund will provide £40 million in grants to support projects that create jobs and promote environmentally friendly practices in the construction sector. This fund is part of the government’s wider plan to make a green economic recovery from the COVID-19 pandemic.

In addition to these schemes, the government has also introduced tax breaks and incentives to encourage businesses to invest in cleaner, more efficient equipment and machinery. For example, companies can claim a 130% tax relief on qualifying investments in new plants and machinery under the Super Deduction scheme. However, this scheme ends on 31 March 2023, so get your purchases in quickly!

How has this been received by the industry?

These schemes and initiatives have been welcomed by contractors and construction companies, who have expressed concerns about the impact of the red diesel ban on their businesses. Many businesses have already started to take steps to adapt to the new regulations, such as investing in more efficient machinery and exploring alternative fuels. Still, the financial support provided by these schemes will undoubtedly make the transition easier.

However, some have argued that the government could do more to support businesses affected by the red diesel ban. For example, many have called for the government to provide further funding for research into alternative fuels and to offer more generous tax incentives for businesses that invest in cleaner, more efficient equipment.

What does this mean for you?

The push towards a greener construction industry is well underway, with more funding expected. So, now is the time to prepare for the future by looking into greener solutions. Although it may seem like a significant initial investment, the savings from fuel usage will be huge, and that initial investment can be made far less intimidating with our support.

At Full Metal Finance, we strive to provide as much value as possible. As a team with a wealth of experience in construction asset finance, we understand the struggles of buying new kits, especially with the current state of inflation.

Our Account Directors can talk you through your options from hire purchase and finance lease to refinancing old kit or releasing capital with cashflow finance. We’ll work to find a solution with terms that work for you and your business.

If you’re on board with a greener future for construction and want to invest in it, get in touch with us today to see how we can help.

Hire Purchase And Finance Lease In The Construction Industry

When you need to upgrade or increase your construction equipment, asset finance can help you spread the cost over time and even include helpful terms such as deferring VAT or seasonal payments.

Hire Purchase and Finance Lease are popular finance solutions for purchasing new construction assets, but which is right for you?

Below, you’ll find our guide to understanding the key differences between the two products to guide you to the option that suits you best. Our Account Directors are on hand to take you through both products and any others that might suit your needs, too. Don’t hesitate to get in touch [link] for an impartial, no-obligation conversation.

Hire Purchase (HP)

Hire Purchase (HP) is a finance option where monthly payments are made over an agreed period to purchase a piece of kit. Essentially, you are hiring the asset from the finance company until you have paid off the entire amount owed, at which point you will own the asset outright. The amount you pay each month will depend on the value of the asset, the length of the agreement and the deposit you put down. Once you make the final payment, the kit is yours to keep. We offer both fixed rate and variable rate products.

One of the main advantages of Hire Purchase is that you have a clear understanding of the total cost of the asset, as the interest rate can be fixed for the length of the agreement. This means that you can budget accordingly and plan your finances. Additionally, as you are the legal owner of the asset, once you have paid off the entire amount, you are free to sell it and get some money back once you’re finished with it. Another popular option is to use the equity in the asset as a part exchange against an upgraded asset, keeping your fleet up to date, with minimal/ no upfront cost. We call this the upgrade-cycle.

Finance Lease (FL)

A Finance Lease (FL) is where you would make monthly payments to a finance company to rent an asset. Unlike with HP, you will not contractually own the asset at the end of the finance period.

Instead, you continue to rent the asset from the lender for a ‘peppercorn rental’ at the end of the finance period. Alternatively, you can appoint a third party to sell the asset to and recoup a high percentage of the sales proceeds.
An advantage of FL is that the monthly payments are plus VAT, meaning that you do not have to pay the full VAT upfront. This can be a bit easier on cashflow.

Hire Purchase vs Finance Lease

The main difference between HP and FL is who owns the asset over the period of the agreement. With HP, you are the legal owner of the asset once you have paid off the amount owed. But with FL, you do not have legal ownership of it. This means that you cannot sell the asset without the consent of the finance company.

Which Option is best for You?

It ultimately comes down to your personal needs and what you want from a finance agreement.

If you are looking for long-term ownership of the asset and want to have the freedom to sell the equipment whenever you wish, then HP may be the better option for you. Additionally, if you want to claim capital allowances on the asset, then HP is the only option.

But if you are a business looking to keep your equipment up to date, FL may be a better option as it allows you to refresh your fleet more frequently.

Weigh up your options, the advantages and disadvantages of both, and then compare that to your needs. Not forgetting, you should choose a reliable and reputable company to provide finance for you.

Full Metal Finance specialises in the construction industry. We have a wealth of construction knowledge, with over 30 years of combined experience across the team. We have proven that we are one of the best in the industry with over 200 five-star Trustpilot reviews and our abundance of long-standing customers.

If you are interested in securing HP or FL for a new machine, or maybe even another type of finance, then get in contact with us today and speak to one of our dedicated Account Directors.