HSBC Equipment Finance: asset funding for UK businesses

If you’re eyeing up new vehicles, IT systems or machinery for your business, external funding can help ease the immediate hit to your cash flow. Even if your reserves would cover the cost of these investments, draining them could leave your business financially vulnerable. HSBC Equipment Finance is a leading provider in this space, but there are also alternatives.

In this guide, we’ll walk you through how it works, the difference between leasing and hire purchase, how it compares to traditional small business loans, and whether it’s the right fit for you.

We’ll also take a look at real-world experiences, sustainability-focused options, and alternative lenders like iwoca, so you’ve got all the facts in one place.

What is HSBC Equipment Finance and how can it support your business?

HSBC Equipment Finance helps businesses access the tools they need to grow without large upfront costs. It offers two core products: Hire purchase and finance leasing.

Both options allow you to get your hands on vital equipment straightaway, while paying for it over time.

What types of equipment can I finance with HSBC Equipment Finance?

You can fund a wide variety of assets, including commercial vehicles, agricultural machinery, construction equipment, office furniture, medical technology and IT equipment.

This type of finance is ideal if you want to invest in business-critical assets but prefer not to tie up working capital. It can be particularly useful for expanding operations, modernising infrastructure or replacing ageing equipment.

Typical agreements run from one to five years, with costs varying based on the value of the asset and the type of agreement. The monthly repayments are predictable, and you get the reassurance of working with a major high street lender.

Hire purchase vs leasing: which HSBC Equipment Finance option is best for you?

Hire purchase and leasing might seem similar at first, but there are subtle differences, and they serve different needs.

With hire purchase, you pay in instalments to own the equipment at the end of the term. Once you’ve made the final payment, the asset is yours. So this can work well if you plan to use the equipment long-term and want it on your balance sheet.

In contrast, leasing means you’re essentially renting the equipment. HSBC owns it throughout the agreement, and you return it at the end (though some agreements allow upgrades or extended use).

Let’s look at how they compare in practice:

Your option depends on how long you need the asset, your tax strategy, and how much control you want.

If conserving cash flow is your top priority, leasing might offer more flexibility. But if long-term cost efficiency matters more, hire purchase could make more sense.

How HSBC Equipment Finance compares to traditional business loans

With asset finance, the loan is secured against the equipment itself. You don’t get a lump sum to spend as you choose, as with a traditional business loan – instead, the funding goes directly towards the specified asset.

That might sound restrictive, but it also lowers risk and can make approval easier (particularly if your credit history isn’t perfect). Repayments are usually fixed, making budgeting straightforward.

How does HSBC Equipment Finance compare to a traditional business loan?

• Business loans can be unsecured business loans or require separate collateral, come with flexible use, and might offer longer terms.
  
• Equipment finance is focused, often quicker for asset purchases, and can reduce upfront VAT strain if structured correctly.

HSBC Equipment finance involves tighter restrictions on the use of the funds – you can only use them for a specific asset, while a business loan can be used more flexibly. However, the fact that the asset acts as collateral for the equipment finance can offer lower interest rates for borrowers.

Green Asset Finance: How HSBC helps businesses invest in sustainable equipment

HSBC’s Green Asset Finance scheme supports investments that reduce environmental impact. It caters to businesses that want to align their operations with sustainability goals or take advantage of incentives like lower running costs and grants.

Eligible assets include:

• Leasing for electric and hybrid vehicles.
• Solar and energy-efficient systems.
• Low-emission plant and machinery.

Through this programme, you may benefit from interest rate discounts, enhanced support, and eligibility for government schemes. Not only does this make environmental investment more affordable, but it also improves your public image and can attract eco-conscious customers.

The impact of HSBC’s fraud prevention measures on UK businesses

HSBC Equipment Finance features extra fraud prevention systems to keep you safe. These include: Customer verification, secure online documentation, and active monitoring of transactions.

The benefit, of course, is enhanced security, especially when making high-value transactions. It helps prevent identity fraud and ensures only authorised users access funding.

The trade-off is that onboarding may feel more rigorous. You may be asked for extra documentation or have to go through multi-step approval processes. For some, this might slightly delay access to funds – a factor worth considering if you need fast funding.

How do I apply for HSBC Equipment Finance?

The process of applying for HSBC equipment finance can take anywhere from a few days to several weeks, depending on the asset and complexity of your case. You can either speak with a relationship manager if you have an existing HSBC business account, or contact them directly to discuss your needs.

1. Initial enquiry: Speak with HSBC or apply online to outline your needs.
2. Asset details: You’ll need to provide information about the equipment.
3. Eligibility check: HSBC typically looks for stable turnover, clear credit history, and at least a year or two of trading history.
4. Submit documents: This may include bank statements, tax returns, and supplier invoices.
5. Approval and payout: Once approved, HSBC pays the supplier, and you begin repayments.

What UK businesses say: Customer experiences with HSBC Equipment Finance

On Trustpilot, UK businesses highlight the reliability and professionalism of HSBC’s business banking. Positive reviews often point to the strength of the HSBC brand, customer support when things go awry, and security.

However, others have flagged drawbacks, particularly the pace at which approvals and security happen. Some customers feel the process can be slow and rigid. 

That’s where alternative lenders like iwoca come into the picture. With quicker onboarding, flexible repayment plans, and fully digital applications, they can be a better fit for businesses needing agility.

Choosing the best way to fund your equipment needs

HSBC Equipment Finance can work well for large, planned purchases – especially when sustainability or specific VAT structuring is a priority.

But if you’re looking for something faster, more flexible, and more tailored to your business, iwoca could be a better fit.

With an iwoca Flexi-Loan, you get full control:

• Borrow only what you need, when you need it – up to £1,000,000 for eligible businesses.
• Repay early anytime, with no fees or penalties
• Pay interest only on what you use, so you’re not stuck paying for money you don’t need.
• Top up your loan as your business grows, helping you move with new opportunities without starting from scratch.

Whether you’re covering a cash flow gap, investing in equipment, or scaling up for a new contract, iwoca gives you the agility to act fast.

You can apply in minutes and get a decision in as little as 24 hours. Find out more about iwoca small business loans.