Get the Best Tools on Finance for Your Trade

Equipment Finance Explained

Tool finance is a credit agreement that spreads the cost of work equipment across fixed monthly payments instead of one lump sum. For most tradesmen the problem is not whether the kit is worth buying, it is that a van refit, a mitre saw, a plunge saw and a set of cordless drills all land in the same month. Finance moves that onto a payment plan you can cover out of the jobs the tools help you win.

We are a broker, not a lender. We take one application, put it in front of a panel of lenders who fund trade equipment, and come back with the finance options that suit your trading history and the tools you are buying. You keep the choice of supplier, brand and term. We handle the comparison and the paperwork.

How does tool finance work for a tradesman?

Tool finance works by having a lender buy the equipment and letting you repay the cost, plus interest, over an agreed term. You pick the tools and the supplier, we agree the finance, the lender settles the invoice directly, and the kit comes to you on the supplier's normal next day delivery or collection terms.

When you apply for finance the application itself is short. We need to know what you are buying, what it costs, how long you have been trading and roughly what the business turns over. From there we can usually confirm which lenders will look at it the same day, normally with a decision inside four hours. Terms typically run from 1 to 5 years, and one agreement can cover a single power tool purchase or a full workshop fit-out, hand tools and all.

Because the tools act as security, the rate is normally better than an unsecured business loan of the same size. That is why we point tradesmen at asset finance when the money is going on equipment.

What does it cost to spread the cost of power tools?

What it costs to spread the cost of power tools comes down to three numbers: the amount borrowed, the term and the rate. Stretch the term and the monthly payment drops but the total repayment rises. Shorten it and you pay less overall but need more headroom each month. We will show you the same purchase across two or three finance options so you can see the trade-off before you commit.

A deposit is not compulsory on most agreements, but putting one down reduces what you borrow and often improves the rate a lender will quote. On a representative example of £10,000 over 36 months at 7.9% APR representative, the payment is around £310 a month and the total repayable is £11,160. Your own quote will differ and every offer is subject to status.

Whatever finance offer you are looking at, ours or a retailer's, check whether the advertised rate is the representative APR or the rate you have actually been given. On point of sale deals, the headline number is what a proportion of applicants get, not everyone.

Is hire purchase or leasing better for tools?

Hire purchase transfers ownership of the equipment to you once the final payment clears. A lease keeps ownership with the finance company and gives you use of the kit for a rental. That single difference drives most of the decision.

For hand tools, power tools and anything you expect to still be using in five years, hire purchase usually makes more sense. You are buying an asset that holds its value and keeps working long after the payments stop. A £4,000 set of Makita cordless kit on hire purchase is yours outright at the end of the agreement, and there is nothing to hand back.

Leasing earns its place on higher value or faster moving equipment. Diagnostic gear, testing rigs and anything with software in it dates quickly, and a lease lets you hand it back and upgrade rather than own something obsolete. Lease payments are also lower month to month for the same equipment value, which matters when cashflow is the constraint rather than total cost.

Can you finance Makita, DeWalt, Milwaukee and Festool kit?

Yes. Finance follows the invoice, not the badge on the tool, so any brand from a legitimate supplier can go on an agreement. Most of the tools we finance are Makita, DeWalt, Milwaukee, Bosch, Festool, Hilti and Snap-on, because those are the brands tradesmen buy and they hold resale value, which lenders like.

You are not tied to one retailer either. We can pay a national tool superstore, a local merchant, a specialist distributor or a manufacturer direct, so you can chase the best deals rather than shop where you happen to hold an account. Mixed baskets are fine: one agreement can cover a Festool dust extractor, a DeWalt rotary hammer, a set of impact drivers and the tool storage to put it all in.

What equipment qualifies for tools on finance?

Almost any equipment used to earn money in a trade business qualifies for finance. That covers power tools such as combi drills, angle grinders, circular saws, mitre saws, nail guns and impact wrenches, along with air tools, welding sets, laser levels, pressure washers, dust extractors and diamond core drills.

It also covers the things people forget to include. Tool storage, van racking, site boxes, generators, compressors, access equipment and the power tool accessories that make the kit usable are all fundable, and putting them on one agreement beats buying them piecemeal on a card. The exception is pure consumables: screwdriver bits, blades and abrasives get used up, so lenders would rather see them bought out of working capital.

At the heavier end we arrange finance on mini excavators, scaffolding systems, planer thicknessers, table saws and workshop machinery, from £1,000 up to £500,000.

Can you get tools on finance with bad credit?

Bad credit does not rule out tool finance, it changes which lenders will look at the application and what rate they offer. Defaults, a past CCJ, a previous business that did not work out and thin credit history are all things our panel sees regularly, and several of the lenders we use price for that risk rather than declining on sight.

What helps is evidence that the work is there. Signed contracts, a full diary, regular payments from the same commercial customers and bank statements showing money moving through the account all carry weight. A deposit helps too, because it reduces the lender's exposure, as does the fact the equipment itself is security.

Be careful with anything advertised as tool finance with no credit check. Any lender arranging a genuine agreement has to assess whether you can afford the repayments, and that means a credit check. What varies is whether the first one is a soft search that leaves no footprint on your file.

Should you buy tools through the business or personally?

Buying power tools through the business beats buying them personally for anyone trading as a sole trader, partnership or limited company. Business finance is assessed on the trading picture rather than your personal income, the amounts available are larger, and the cost can be set against your tax bill.

The alternative most tradesmen meet first is consumer credit at a tool retailer's checkout: buy now, pay later instalments split over three or four payments, or a longer payment plan at a much higher APR. For a £300 purchase that is a reasonable finance option. For £8,000 of power tools it is an expensive way to borrow, the credit sits on your personal file, and the payment plan only works in that one retailer's shop. Retail credit of that kind is regulated consumer lending, and the providers behind it are authorised and regulated by the Financial Conduct Authority. Business equipment finance sits under different rules, which is part of why lenders can look at the trading picture rather than just your personal file.

How does financing tools affect your tax bill?

Equipment bought on hire purchase qualifies for capital allowances, and the Annual Investment Allowance lets most businesses write off up to £1 million of qualifying plant and machinery against profits in the year of purchase. The interest element of the payments is deductible on top of that, as a business expense.

Leases work differently but are still efficient. Rather than claiming capital allowances, you deduct the full rental payments as a trading expense across the life of the agreement. Which route leaves you better off depends on your profits and whether you want the deduction now or spread out.

We are not accountants and this is not tax advice, so run the numbers past yours first. What we can do is arrange the agreement in whichever structure your accountant says suits the business.