Used equipment finance second-hand kit, properly funded

Can you get finance on used equipment?

Yes. Many lenders will fund used machinery and equipment on hire purchase or lease, provided it has a clear value, a resale market and enough working life left for the term. The older the asset, the more lenders focus on its condition, the seller and how long it will keep earning for your business.

Buying used is often the smart choice. A well-maintained second-hand excavator, oven, CNC machine or press can cost far less than new, arrive sooner and start earning straight away. The challenge is that lenders take more risk on older kit, so the deal has to be presented properly: what the machine is, who's selling it, what it's worth and how long it should last.

That's where we help. As a broker, we know which lenders on our panel are comfortable with older assets, auction purchases and private sellers, and which ones prefer dealer-supplied, warrantied kit. We'll gather the details lenders need up front so there are fewer surprises, and we can usually tell you early whether a particular machine is likely to be fundable.

This page covers buying second-hand. If you already own equipment and want to release cash from it, see sale and leaseback or asset refinance. For heavy plant specifically, our plant and machinery finance page goes into more detail.

Key features

What businesses use it for

• Used plant bought at auction
• Second-hand CNC and fabrication machinery
• Ex-demo catering and kitchen equipment
• Refurbished printing and packaging lines
• Machinery bought from a closing business
• Used agricultural and groundcare kit

Buying from a dealer, at auction or privately

Age limits, valuations and deposits

Most lenders set a maximum age for the asset at the end of the agreement rather than at the start, so a ten-year-old machine might be offered a shorter term than a three-year-old one. Limits vary a lot by asset type: durable kit such as presses, tractors and heavy plant can often be funded at a greater age than IT or fast-changing technology. Where a machine is older, specialist or high value, lenders may ask for an independent inspection or valuation and will usually lend against that figure rather than the asking price.

If the price is above what the lender thinks the machine is worth, you'd normally need to make up the difference as a deposit. A clear description (make, model, serial number, year, hours or output count) and photos help lenders reach a decision faster.

Buying at auction

Auctions can offer good value, but payment is often due within days. Lenders usually can't fund after the hammer falls without notice, so speak to us before the sale. We can approach lenders with the lot details and your business information so you know roughly how much you can bid with finance behind you. Remember that buyer's premiums and transport may not always be fundable.

Tax on second-hand equipment

GOV.UK says full expensing and the 40% first-year allowance only apply to plant and machinery that is new and unused, so second-hand kit doesn't qualify for them. Used kit may still be covered by the Annual Investment Allowance, which GOV.UK says is £1 million and applies to most plant and machinery, and items bought on hire purchase can qualify once you start using them (though not the interest). Speak to your accountant about your own position.

What lenders typically look at

• Full machine details: make, model, serial number, year and hours
• Seller details and an invoice, auction lot sheet or bill of sale
• Photos and any service or inspection records
• Business bank statements, typically the last three to six months
• Latest accounts or tax returns
• Director or owner details for identity and credit checks