Is a deposit required?

Whether a deposit is required depends on the product. For asset finance and hire purchase, a 10% to 30% deposit is standard. For unsecured term loans, no deposit is required: the full advance is paid into your account. For commercial mortgages, deposit (loan-to-value) typically runs 25% to 40% on owner-occupied, higher on investment property.

By product. Asset finance hire purchase: 10% to 30% deposit on new equipment, 20% to 40% on used. The deposit reduces the lender's exposure if the borrower defaults early in the term and the asset has not yet depreciated to match the outstanding balance. Unsecured working capital term loans: no deposit. Funds are paid into the borrower's account on drawdown, with monthly repayments starting in month 1 or 2. Merchant cash advance: no deposit, but a higher cost of capital priced in. Commercial mortgages: 25% to 40% LTV deposit on owner-occupied, 30% to 45% on investment property, with bridging at higher LTVs short-term.

Two ways to reduce or eliminate a deposit. First, use existing equity. If you own equipment outright, a sale-and-leaseback can fund the deposit on a new asset purchase from the same lender. Second, layer products. A small unsecured working capital top-up can fund a 20% deposit on a larger HP agreement, smoothing the upfront cash impact. Both routes need to be modelled against blended cost.

For zero-deposit asset finance specifically (rare but available), see our asset finance guide and the lenders most willing to underwrite zero-deposit terms. Specialist UK options include Time Finance and Aldermore for established borrowers with strong trading histories.