Finance Assets arranges asset finance for building contractors, helping UK firms fund plant, vans, site cabins and tools without tying up the cash a job needs to run.
Asset finance for building contractors spreads the cost of equipment over 2 to 5 years, so money stays free for wages, materials and the gap before interim valuations are paid. It suits builders taking on a bigger contract, replacing hired plant with owned machines, or growing a van fleet as the team grows.
Written by Marcus Wright, founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed October 2026.
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The short version
- Asset finance lets building contractors spread the cost of plant, vans and site equipment over 2 to 5 years.
- Hire purchase leads to ownership, while leasing and contract hire keep the equipment with the lender.
- Owning plant on finance is often cheaper than long-term hire on jobs that run for months.
- Lenders look closely at order books, payment terms, retentions and CIS deductions.
- Finance Assets arranges asset finance for building contractors trading as limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000.
| Item | Detail |
|---|---|
| Equipment covered | Excavators, dumpers, telehandlers, vans, tippers, site cabins, access equipment, tools and software |
| Terms | Usually 2 to 5 years, matched to how long the equipment stays in use |
| Paid upfront | Hire purchase: often a 10% deposit plus VAT. Leases and contract hire: usually 1 to 3 rentals in advance |
| New or used | Both, including used plant from dealers, auctions and other contractors |
| Extras | Attachments, quick hitches, van racking, tracking and livery can often be included |
| Who we help | Limited companies and LLPs, plus sole traders and partnerships on business agreements over £25,000 |
Equipment we finance for building contractors
Lenders will fund most of the equipment a building firm relies on, from the plant that digs the footings to the vans that get the team to site.
| Equipment group | Examples |
|---|---|
| Earthmoving plant | Mini and midi excavators, wheeled excavators, backhoe loaders and attachments |
| Site plant | Site dumpers, rollers and compaction kit, mixers and telehandlers |
| Vans and trucks | Panel vans, crew vans, tipper trucks and grab lorries. See HGV finance for larger trucks |
| Site accommodation | Site cabins and welfare units, toilet blocks and secure stores |
| Access equipment | Scissor lifts, cherry pickers and scaffold towers. See scaffolding finance for tube and fitting stock |
| Tools and survey kit | Laser levels, total stations, cordless tool packs, cut-off saws and diamond drilling rigs |
| Site power and security | Generators, lighting towers, site CCTV and alarm towers |
| Office and software | Estimating, project management and accounting software, and IT |
How building contractors use asset finance
Building contractors usually turn to asset finance when a job needs equipment before the money for that job has come in.
- Starting a larger contract. Funding the extra plant, vans and cabins before the first interim valuation is paid.
- Swapping hire for ownership. Buying the machines the business hires most often, so the hire bill turns into a payment towards an asset.
- Growing the team. Adding vans and tool packs one at a time as new trades and site managers join.
- Meeting site standards. Replacing older plant with newer machines that meet main contractors’ emissions and safety requirements.
- Releasing cash. Refinancing plant and vans the business owns outright to fund working capital.
Finance options for building contractors
Building contractors mostly buy plant and vans on hire purchase, and lease equipment that dates or that they only need for a set period. Our types of asset finance guide covers each option in more depth.
| Type | How it works | Suits |
|---|---|---|
| Hire purchase | A deposit, then fixed monthly payments. You own the equipment after the last one | Plant and vans you will run for years |
| Finance lease | Rentals with VAT added to each one. The lender owns the equipment | Spreading the VAT on a large plant order |
| Operating lease | Lower rentals priced around the expected resale value. You hand it back at the end | Plant needed for a contract of a fixed length |
| Contract hire | A fixed rental for an agreed term and mileage, often with maintenance included | Van fleets with predictable monthly costs |
Hire purchase for building contractors
Hire purchase is the most common way building contractors buy excavators, dumpers and vans. You pay a deposit, often around 10% plus the VAT, then fixed monthly payments, and the machine is yours after the last one. You are treated as the owner for tax from the start, so you may be able to claim capital allowances, and a balloon payment can lower the monthly cost on plant that holds its value.
Finance lease for building contractors
A finance lease suits a large order of plant or site equipment, because VAT is added to each rental instead of being paid upfront. The lender keeps ownership. At the end you can usually keep the equipment on a small secondary rental, or sell it and receive most of the proceeds.
Operating lease for building contractors
An operating lease prices the rentals around what the equipment should be worth at the end, so the monthly cost is lower and the lender takes the resale risk. It works well when a contract needs extra plant for two or three years and the business does not want to own it afterwards.
Contract hire for building contractors
Contract hire is used mainly for vans and pickups. You pay a fixed monthly rental for an agreed term and mileage, and servicing, maintenance and tyres can often be included. The vehicle goes back at the end, so fleet costs stay predictable and there is nothing to sell.
VAT and tax for building contractors
Plant, commercial vans and tools are not cars, so a VAT-registered contractor can usually reclaim the VAT in full. On hire purchase, VAT on the full price is usually paid at the start and reclaimed on the next return, and many lenders can defer it for a few months. On a lease or contract hire, VAT is added to each rental. With hire purchase you may be able to claim capital allowances, and lease rentals are usually an allowable business expense. Check the tax treatment with your accountant.
Building contractor finance costs: a worked example
An 8 tonne excavator at £68,000 and a 6 tonne site dumper at £22,000, £90,000 in total, cost about £1,681 a month on a 5-year hire purchase, or about £1,443 a month with a 20% balloon.
| Item | Standard | With 20% balloon |
|---|---|---|
| Plant price (excl. VAT) | £90,000 | £90,000 |
| Deposit (10%) | £9,000 | £9,000 |
| VAT paid upfront | £18,000 | £18,000 |
| Monthly payment (60 months) | £1,681.43 | £1,442.78 |
| Final balloon payment | None | £18,000 |
| Total interest | £19,886 | £23,567 |
The balloon frees up about £239 a month, in exchange for about £3,681 more interest over the five years. If the same two machines were on hire for most of the year, the monthly finance payment is often less than the hire bill, and the machines are owned at the end.
Illustration calculated in October 2026, assuming an interest rate of 9% a year. It is not a quote. Your rate depends on your trading history, credit profile and the equipment.
What lenders look for in building contractors
Lenders look at the usual financial documents, plus the things that show how steady a building contractor’s income is.
- Your last 2 years of filed accounts, or management accounts and a forecast for newer firms
- Your last 3 to 6 months of business bank statements
- Your order book, and the details of any large contract the equipment is for
- How and when you are paid, including retentions and CIS deductions
- An aged debtor list, so the lender can see who owes you and for how long
- Supplier quotes, plus photo ID and address history for each director, member or partner
Asset finance pays for equipment, not for the wait for valuations. For cash flow funding against applications for payment, our main site, Bolton Business Finance, covers construction finance for UK companies.
Related guides
- Asset finance for civil engineering firms
- Asset finance for plant hire companies
- Asset finance for demolition companies
- Asset finance for scaffolding companies
- Asset finance for electrical contractors
- Asset finance for renewable energy
- Telehandler finance
- Portable cabin and modular building finance
- All sectors we finance
Who we can help
We arrange asset finance for building contractors that trade as UK limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000 that are for business purposes. We are not authorised by the FCA, so we cannot arrange agreements of £25,000 or less for sole traders or partnerships of two or three partners, or finance for personal use.
Asset finance for building contractors FAQs
Can a building contractor buy plant on finance instead of hiring it?
Yes. Excavators, dumpers, rollers and access equipment are widely funded on hire purchase, new or used. On long jobs or when the same machine is needed week after week, the monthly finance payment is often lower than the hire charge, and the machine is yours at the end. Hire still makes sense for kit you only need now and then.
Can a new building company get asset finance?
Yes, although lenders look more closely at firms with a short trading history. Directors with years in the trade, signed contracts or a strong order book, and a deposit all help. Hire purchase on plant and vans that hold their value is usually the easiest route, and a personal guarantee may be asked for.
Do retentions and CIS deductions affect asset finance applications?
They can. Lenders look at how and when you are paid, so a business with large retentions held back or heavy CIS deductions may need to show it has the cash flow to meet the monthly payments. Good management accounts and an aged debtor list help a lender see the full picture.
Can I finance used plant from an auction?
Often, yes. Many lenders fund used plant from auctions, dealers and other contractors, as long as there is a proper invoice and the machine’s serial number, age and hours are known. Older machines may be offered a shorter term so the agreement ends while the machine still has a sensible resale value.
Can I put vans, plant and tools on one agreement?
Usually, yes. Lenders can combine several items from different suppliers on one agreement or under one facility, which means one credit decision and one monthly payment. Smaller items such as power tools and laser levels are often easier to fund when bundled with larger plant.
Can I release cash from plant I already own?
Yes. Through a sale and hire purchase back, a lender buys plant or vans you own outright and sells them back to you over a fixed term, so you keep using them. Building contractors use it to fund the start of a large contract, a new machine or working capital.
Get an asset finance quote for your building firm
Tell us what you want to finance
Send us the plant, vans or equipment, the prices and a few details about your contracts. We will come back with the options that are realistic and what they are likely to cost.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd, which trades as Finance Assets. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders. Call 0161 546 9128.
Finance Assets is a trading name of Bolton Business Finance Ltd, an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. All lending is for business purposes only. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.