Asset finance for recycling operations spreads the cost of balers, shredders, granulators, shears, picking lines and material handlers over 3 to 7 years, so you can process more tonnage without tying up working capital.
Finance Assets arranges asset finance for recycling centres, materials recovery facilities, scrap metal merchants, plastics and paper reprocessors and end-of-life vehicle sites, UK-wide. We compare a panel of 135+ lenders for each purchase, new or used, and lend to businesses only.
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 for recycling operations covers balers, compactors, shredders, granulators, shears, picking lines, separators, weighbridges and material handlers.
- Mobile plant and balers are the easiest to fund. Fixed sorting lines are widely funded too, with installation included.
- Lenders check your environmental permit or exemption, waste carrier registration and offtake contracts alongside the accounts.
- Finance Assets arranges recycling equipment finance for limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000.
| Item | Detail |
|---|---|
| Equipment covered | Balers, compactors, shredders, granulators, shears, picking lines, trommels, separators, weighbridges, material handlers and loading shovels |
| Terms | Usually 3 to 5 years for mobile plant, and up to 7 years for new balers and fixed processing equipment |
| Paid upfront | Hire purchase: often a 10% deposit plus VAT. Leases: usually 1 to 3 rentals in advance |
| Used equipment | Widely funded, depending on age, condition and how easily it can be resold |
| Not covered | Land, buildings, site works and permit costs, which are usually funded with a commercial loan or mortgage |
| Who we help | Limited companies and LLPs, plus sole traders and partnerships on business agreements over £25,000 |
Recycling equipment we finance
Lenders fund most of what a recycling site runs, from the baler at the end of the line to the handler that feeds it. Plant that can be moved and resold is the easiest to fund, and fixed lines are funded with the supplier’s installation included.
| Equipment group | Examples |
|---|---|
| Balers and compactors | Vertical balers, automatic horizontal balers, two-ram balers, static and portable compactors |
| Size reduction | Shredders, granulators, crushers and wood chippers, mobile or fixed |
| Sorting and separation | Picking lines, conveyors, trommels, star screens, magnets, eddy current separators and optical sorters |
| Scrap metal plant | Shears, baler shears, car depollution rigs, cable strippers and weighbridges |
| Handling machines | Material handlers, loading shovels, telehandlers and forklifts |
| Containers and vehicles | Skips and RoRo containers, bins, hook loaders and grab lorries |
Baler and compactor finance
A baler turns loose cardboard, paper, plastic film or metal into bales that are cheaper to store and move and that sell for more. Lenders know balers well and fund them new or used.
- Vertical balers. Lower cost machines for smaller recycling centres and for businesses baling their own cardboard and film. They suit shorter terms of 2 to 4 years.
- Automatic horizontal balers. The workhorse of a busy site. They often run 15 years or more, so lenders are comfortable with terms of up to 7 years on new machines.
- Infeed and installation. The infeed conveyor, wire tying system and installation can go on the same agreement as the baler.
- Compactors. Static and portable compactors are funded on their own or with the vehicles and containers that serve them.
Shredder, granulator and sorting line finance
Shredders and granulators reduce material so it can be sorted, washed or sold. Mobile shredders and trommels are easy to fund and resell, and are often funded used. Fixed sorting lines, including picking cabins, magnets, eddy current separators and optical sorters, are widely funded with installation, and lenders look at the site permit and how long you hold the site.
Plastics reprocessors often add washing, drying and extrusion to their granulators. Our plastics machinery finance guide covers that equipment in more depth.
Scrap metal recycling equipment finance
Scrap metal merchants and end-of-life vehicle sites fund shears, baler shears, material handlers with grabs or magnets, depollution rigs and weighbridges. Material handlers are among the easiest machines to fund because they hold their value and sell well used. Lenders will want to see your scrap metal dealer’s licence alongside the usual documents.
Finance options for recycling operations
Most recycling businesses buy plant on hire purchase. Our types of asset finance guide covers each option in more depth.
| Type | How it works | Suits |
|---|---|---|
| Hire purchase | A deposit, then fixed payments. You own the asset after the last one | Balers, shears and material handlers you will keep for many years |
| Finance lease | Rentals with VAT added to each one. The lender owns the asset | Keeping the VAT outlay down on a new sorting line or large baler |
| Operating lease | Lower rentals set around the expected resale value. You hand the equipment back at the end | Mobile plant matched to a fixed-term processing contract |
| Refinance | A lender buys equipment you own and sells it back to you over a fixed term | Raising cash for new plant, stock or working capital |
Hire purchase for recycling equipment
Hire purchase is the usual route. You pay a deposit, often around 10% plus the VAT, then fixed payments, and the equipment becomes yours after the final payment and a small option fee. As the owner for tax, the business may be able to claim capital allowances against the cost.
Finance lease for recycling plant
A finance lease adds VAT to each rental instead of charging it on the full price at the start, which helps with a large sorting line. The lender owns the equipment. At the end of the main term you can usually keep it on a small secondary rental.
Refinancing equipment you own
If the business owns balers, handlers or plant outright, a sale and hire purchase back lets a lender buy them and sell them back to you over a fixed term, so they stay in use. Recycling businesses often use this when material prices fall and cash is tight.
VAT and tax on recycling equipment finance
Hire purchase means paying the VAT up front and may bring capital allowances, while leasing spreads the VAT across the rentals.
| Type | VAT | Tax treatment |
|---|---|---|
| Hire purchase | VAT on the full price is payable at the start, and a VAT-registered business normally recovers it on its next return | The business counts as the owner for tax, so it may be able to claim capital allowances, such as the annual investment allowance, or full expensing for companies on new equipment |
| Finance lease | VAT is charged on each rental and recovered through normal returns | Rentals are usually deductible from profits |
| Operating lease | VAT is charged on each rental | Rentals are usually deductible, and the lender takes the capital allowances |
Check with your accountant how each option fits the business’s tax position before you commit.
Baler finance costs: a worked example
A new automatic horizontal baler at £150,000 costs about £2,802 a month over 5 years on hire purchase, or about £2,172 a month over 7 years.
| Item | 5 years | 7 years |
|---|---|---|
| Price (excl. VAT) | £150,000 | £150,000 |
| Deposit (10%) | £15,000 | £15,000 |
| VAT paid upfront | £30,000 | £30,000 |
| Amount financed | £135,000 | £135,000 |
| Monthly payment | £2,802.38 | £2,172.03 |
| Total interest | £33,143 | £47,450 |
The 7-year term lowers the monthly payment by about £630 but adds around £14,307 of interest. It suits a site where bale income is steady and cash flow matters more than total cost, and the baler will still be working well after the agreement ends.
Illustration calculated in October 2026, assuming an interest rate of 9% a year. It is not a quote. Your rate depends on the business’s trading history, credit profile and the equipment.
What lenders look for in recycling operations
Lenders look at the usual financial documents, plus your permits and where your material goes.
- Accounts and bank statements. The last two or three years of accounts and recent business bank statements. Lenders understand that recycling income moves with commodity prices.
- Permits and licences. Your environmental permit or exemption, waste carrier registration and, for metal, your scrap metal dealer’s licence.
- Inputs and offtake. Where your material comes from, such as gate fees or collection contracts, and who buys your bales or processed output.
- Site tenure. For fixed plant, whether you own the site or how long the lease runs.
- Documents. Supplier quotes, plus photo ID and address history for each director, member or partner.
- Existing finance. A list of equipment already on finance and what is left to pay.
Related guides
Who we can help
We arrange asset finance for recycling operations 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 recycling operations FAQs
What can recycling businesses finance?
Most plant and equipment can be financed, including balers, compactors, shredders, granulators, shears, picking lines, trommels, separators, weighbridges, material handlers and loading shovels. Land, buildings and site works are usually funded separately with a commercial loan or mortgage.
Is there asset finance for recycling centres?
Yes. Recycling centres and materials recovery facilities fund balers, sorting lines, handlers and containers the same way as other recycling operations, on hire purchase, leasing or refinance. Privately run sites need to trade as a business that meets the lender’s criteria.
Can I finance a used baler?
Yes. Many lenders fund used balers, depending on age, condition and make. A supplier inspection or recent service record helps, and the term is usually shorter than for a new machine.
Can a scrap metal merchant get asset finance?
Yes. Scrap metal merchants fund shears, material handlers, depollution rigs and weighbridges. Lenders will want to see a valid scrap metal dealer’s licence and environmental permit alongside the accounts.
Can installation be included in the finance?
Usually, yes. The supplier’s installation, infeed conveyors, wiring and commissioning can go on the same agreement as a baler or sorting line. Building work and groundworks are normally funded separately.
Do falling material prices affect my application?
Lenders know recycling income moves with commodity prices. They look at your trading over a few years, your gate fees and collection income, and who buys your output, rather than a single weak month.
Can a partnership or sole trader running a recycling business get asset finance?
Yes, on business agreements over £25,000. Agreements of £25,000 or less for sole traders and partnerships of two or three partners are regulated, and we are not authorised by the FCA to arrange them.
Get a recycling equipment finance quote
Tell us what you want to finance
Send us the equipment, the price, whether it is new or used, and the material it will handle. 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.