Loan versus lease for funding business assets:

2 min read

You ownLoan outcome

You rentLease outcome

Cash & taxWhat differs

How they differ

A business loan gives you cash you can spend on anything, including buying kit outright — you own the asset from day one. A lease (or hire purchase) is tied to a specific asset: you pay to use it over a term, and ownership either stays with the lessor or transfers at the end. Leasing usually needs less cash upfront but can cost more overall.

What this means for your company

Choose a loan when you want the asset on your books, full ownership and freedom to use the money flexibly. Choose a lease when you want to preserve cash, keep the asset off the balance sheet, or replace kit that dates quickly. Compare the total cost of each with the true-cost calculator and read asset finance vs a business loan.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Which is cheaper, a loan or a lease?

It depends on the asset and term. A loan is often cheaper overall if you keep the asset for its full life; a lease can be cheaper if you replace equipment frequently. Compare total repayable, not monthly cost.

Does a lease appear on my balance sheet?

Under current UK accounting, finance leases usually do and operating leases may not, depending on the standard you apply. Ask your accountant, as it affects gearing and how lenders read your accounts.