What is a commercial finance broker?

A commercial finance broker is a regulated intermediary that searches the lending market on behalf of a business to find the most suitable finance product — whether that is asset finance, a business loan, a commercial mortgage, or invoice finance. Unlike going directly to a bank, a broker compares deals across many lenders simultaneously. Sorbus Finance is an independent whole-of-market broker with access to 100+ UK lenders, and charges no upfront fees — the broker is paid by the lender only on completion.

What is asset finance and how does it work for UK businesses?

Asset finance allows UK businesses to acquire vehicles, machinery, manufacturing equipment, IT hardware, and other business assets without paying the full cost upfront. Instead of a large capital outlay, you make fixed monthly payments over an agreed term — typically 2 to 7 years. Common structures include hire purchase (you own the asset at the end), finance lease (lender owns it; you use it), and operating lease. A broker like Sorbus Finance compares rates across 100+ lenders to find the best deal for your circumstances.

What types of assets can I finance for my business?

Asset finance covers a wide range of business assets including commercial vehicles and vans, HGVs and fleet vehicles, agricultural machinery, construction plant and equipment, manufacturing machinery, catering equipment, medical and dental equipment, IT hardware and software, and renewable energy installations. Most tangible business assets with a useful life of 2 years or more can be financed.

What is the difference between hire purchase and finance lease?

With hire purchase (HP), you pay a series of monthly instalments and own the asset outright at the end of the agreement — it appears on your balance sheet from day one. With a finance lease, the lender retains legal ownership throughout the term; you use the asset and pay rentals, and at the end you can often extend the lease or sell the asset on the lender's behalf. Hire purchase suits businesses that want ownership; finance lease suits those that want to preserve capital and replace assets regularly.

How much can I borrow for a business loan in the UK?

UK business loans are typically available from £5,000 up to £5 million or more, depending on your business turnover, trading history, and creditworthiness. Unsecured business loans (no collateral required) are generally available up to £250,000–£500,000 for well-established businesses. Secured loans against property or assets allow higher borrowing. Sorbus Finance compares products across 100+ lenders to match your business with the right facility and terms.

Can I get asset finance or a business loan with bad credit?

Yes. While a strong credit profile opens the widest range of lenders and best rates, many specialist lenders in the UK consider businesses and directors with adverse credit history — including CCJs, previous defaults, or prior declines. The key factors are trading history, turnover, affordability, and asset quality. A broker can identify lenders most likely to approve your application before a formal search, protecting your credit score from unnecessary hard searches.

What is the difference between asset finance and a business loan?

A business loan provides a lump sum of cash that can be used for any purpose — working capital, stock, growth investment — and is repaid with interest over a set term. Asset finance is structured specifically around a particular asset (e.g. a van or piece of machinery), with the asset itself typically acting as security. Because the lender has a tangible asset to recover if payments are missed, asset finance usually offers lower interest rates than unsecured business loans.

What is invoice finance and how does it help cashflow?

Invoice finance lets a business release cash tied up in unpaid customer invoices — typically up to 90% of the invoice value within 24 hours — rather than waiting 30, 60, or 90 days for customers to pay. There are two main types: invoice factoring (the lender manages your sales ledger and collects payment) and invoice discounting (you retain control of collections). It is especially useful for businesses with seasonal cashflow, long payment terms, or rapid growth.

What documents do I need to apply for business finance?

Lenders typically require: 3–6 months of business bank statements, the last 1–2 years of filed accounts or management accounts, a completed application form with director details, proof of identity and address for all directors, and (for asset finance) a quote or invoice for the asset being purchased. For commercial mortgages, additional documentation such as property details, rental income schedules, and a business plan may be required. A broker guides you through exactly what each lender needs for your specific application.

How long does it take to arrange business finance?

Simple asset finance or small business loans can be approved and funded within 24–48 hours. More complex facilities — commercial mortgages, large structured loans, or cases with adverse credit — typically take 2–6 weeks. Using a broker speeds up the process because we know which lenders are actively lending, what their criteria are, and how to package your application to maximise approval chances and minimise delays.

How does a finance broker get paid?

Sorbus Finance is paid a commission by the lender on successful completion of a finance arrangement — not by the business owner. There are no upfront fees at any stage. This means you receive whole-of-market advice and lender comparison at no direct cost, and our interest is always aligned with finding you the right deal.

What is the Sorbus Finance Business Finance Health Check?

The Business Finance Health Check is a free, proprietary diagnostic tool developed by Sorbus Finance. It assesses your business across four areas: lending readiness, risk and resilience, exit strategy readiness, and financial controls. It takes under 5 minutes and produces an instant scored report — identifying gaps before you approach lenders, and giving you a prioritised action plan. It is completely free, confidential, and carries no obligation.

Do I need to have been trading for a certain length of time to get business finance?

Most mainstream lenders prefer at least 2 years of trading history, but specialist lenders will consider businesses from 6 months or even earlier for certain products — particularly asset finance, where the asset itself provides security. Start-up business loans are available for businesses under 12 months old, though terms may differ. A broker identifies which lenders are suitable for your trading age before any formal applications are made.

Commercial asset finance guide

How does asset finance affect cash flow, the balance sheet and future borrowing?

Asset finance can improve day-to-day cash flow by spreading the cost of a vehicle or machine over its useful life, but it also creates a fixed commitment that future lenders will consider. In most cases, the agreement and financed asset appear in the business’s financial position, so the structure should be agreed with both commercial and accounting consequences in mind.

The benefit is not that finance makes an asset free. It changes the timing of the cost. Done well, that can let a business buy capacity without draining the cash it needs to operate.

Discuss your asset: 01246 383500 Check your lending position

A proper commercial view: Sorbus Finance is an independent broker, not a lender. We compare suitable options from a panel of more than 100 UK lenders. Rates, approval and terms depend on the asset, business and lender assessment.

Cash flow: the immediate benefit and the permanent obligation

Paying £100,000 cash for a machine removes £100,000 from the bank on day one. Financing the same asset may require a deposit, VAT and monthly repayments instead. That leaves more cash available for wages, stock, marketing and unexpected costs during the period when the machine starts producing revenue.

The trade-off is a fixed monthly commitment. A business should stress-test that payment against quieter months, late customer payments and maintenance costs. The asset needs to earn its place in the cash-flow forecast, not merely fit inside the best month’s bank balance.

Model the finance payment alongside insurance, maintenance, fuel, operator costs and any VAT timing.
Use a conservative revenue assumption, not the most optimistic sales forecast.
Keep enough liquidity for normal trading and an unexpected repair or delayed payment.
Check whether the payment profile can match a seasonal business where appropriate.

Balance sheet and profit-and-loss treatment

Hire purchase and many lease arrangements can result in both an asset and a corresponding liability being recognised in the accounts. Charges, depreciation, rentals and capital allowances can be treated differently depending on the agreement and accounting framework.

This is an area for your accountant, especially if banking covenants, company valuation, shareholder arrangements or statutory reporting matter. A finance broker can explain the commercial structure, but should not substitute for tax or accounting advice.

Future borrowing: what another lender will see

A future lender will usually look at existing monthly commitments, outstanding balances and the purpose of the previous finance. Asset finance can reduce free cash flow available for a new loan, particularly where the business has taken on several agreements in a short period.

It can also be a positive sign when the finance has funded productive assets that increase turnover and margin. The outcome depends on whether the business’s earnings and cash flow have grown faster than its fixed commitments.

Match the term to the asset life

Funding a six-year asset over twelve months can create unnecessary pressure. Funding an asset for longer than its realistic useful life can create a different problem, where the business is still paying for equipment it has already replaced. The sensible term is usually one that reflects the asset’s working life, expected replacement point and cash generation.

This is where a commercially aware broker can add value. The right facility is not simply the one with the lowest first monthly payment. It is the one that works when the business is busy, quiet, expanding or dealing with a problem.

Worked example

Illustrative cash-flow comparison

A logistics business needs a £120,000 tractor unit. Paying cash would leave £50,000 available for fuel, wages and insurance. A 10% contribution followed by a 60-month facility preserves more operational cash, but creates a monthly liability that must be covered through the vehicle’s gross margin.

Before proceeding, the business should model a normal month and a weak month. If the unit’s expected margin covers the payment only in the strongest month, the facility is too tight even if the lender is willing to consider it.

Asset price: £120,000
Illustrative deposit: £12,000
Illustrative term: 60 months
Decision test: Payment covered in a weak month

Figures are illustrative only. They are not a quote or an offer of finance. Your business, asset, deposit, credit profile and lender assessment determine the actual terms.

Questions business owners ask

Does asset finance improve cash flow?

It can improve immediate cash flow by avoiding a large upfront purchase, but it replaces that outlay with an ongoing payment. It improves the business position only when the asset generates or protects enough cash to justify the commitment.

Does asset finance go on the balance sheet?

Often it does, but the exact treatment depends on the agreement, accounting standard and business. Your accountant should confirm the treatment of any proposed hire purchase or lease arrangement.

Will asset finance stop me getting a business loan?

Not automatically. Existing asset-finance payments are part of your overall commitments and will be considered by future lenders. If the funded assets support stronger revenue and cash flow, that can also improve the wider commercial case.

Make the next finance decision with the full picture

Before applying, compare the asset cost, deposit, expected earnings, operating costs and current commitments. Our advisers can help you decide whether hire purchase, finance lease or a different facility is the more commercial option.

Explore asset finance Use the HP vs finance lease tool Visit the Start Up Hub

How does asset finance affect cash flow, the balance sheet and future borrowing?

Cash flow: the immediate benefit and the permanent obligation

Balance sheet and profit-and-loss treatment

Future borrowing: what another lender will see

Match the term to the asset life

Illustrative cash-flow comparison

Questions business owners ask

Make the next finance decision with the full picture

More commercial asset finance guides

Buy outright or finance?

Hire purchase vs finance lease

How much can I finance?

Start-up asset finance