The construction industry is one of the most asset-intensive sectors in the UK economy. From excavators and cranes to commercial vehicles and scaffolding, the equipment required to win and deliver contracts represents a significant capital commitment — and for many construction businesses, paying for that equipment outright is neither practical nor the most efficient use of working capital.

Asset finance for construction businesses provides a way to acquire the plant, machinery, and vehicles needed to operate and grow, while spreading the cost over a fixed term and keeping cash available for day-to-day operations. In this guide, Percy Finance explains how construction asset finance works, which types of equipment can be financed, the main finance structures available, and how an independent broker can help construction businesses access the most appropriate lenders for their requirements. This article is for information purposes only and does not constitute financial advice.

Why Asset Finance Suits Construction Businesses

Construction businesses face a number of financial challenges that make asset finance particularly relevant. Project-based cash flow — where income arrives in stages or upon completion — means that large upfront capital expenditure on equipment can create significant pressure on working capital between contract payments. Asset finance addresses this by spreading the cost of equipment over the term of the agreement, with fixed monthly payments that can be planned around expected project income.

Additionally, the construction sector relies on a wide range of specialist assets — many of which are high-value, long-life, and central to the business’s ability to win and deliver contracts. Because the asset itself forms the basis of the finance arrangement, specialist lenders who understand construction equipment are often better placed to fund these assets than mainstream banks, whose criteria may not account for the specific characteristics of construction plant.

What Construction Equipment Can Be Financed?

A wide range of construction plant, machinery, and vehicles can potentially be considered for asset finance, subject to individual lender criteria. The following are among the most commonly financed assets in the construction sector:
Excavators & Diggers

Mini, midi, and full-size crawler and wheeled excavators for groundworks, drainage, foundations, and civil engineering across all project types.

Telehandlers and Forklifts

Telescopic handlers and forklifts for lifting and placing materials on construction, civil engineering, and infrastructure projects of all type.

Cranes and Lifting Equipment

Mobile cranes, tower cranes, and specialist lifting equipment for commercial, residential, infrastructure, and civil engineering projects alike.

Dumpers and Tipper Vehicles

Site dumpers, articulated dumpers, and tipper trucks for moving materials, spoil, and aggregates across construction and civil engineering work.

Rollers and Compaction Plant

Ride-on rollers, pedestrian rollers, vibratory plate compactors, and trench rammers for groundworks, highway, and UK civil engineering projects.

Demolition and Screening Plant

High-reach demolition machines, crushers, screening and processing plant, and specialist attachments for demolition and civil engineering works.

Scaffolding & Access Equipment

Scaffolding systems, mobile elevated work platforms, cherry pickers, and scissor lifts for safe working at height across all construction sites.

Concrete and Mixing Equipment

Concrete mixers, pump trucks, batching plants, and cement silos for residential, commercial, and civil infrastructure construction project work.

Plant Transport and Haulage

Flatbed trailers, low loaders, plant transporters, and heavy haulage vehicles for moving construction plant and machinery between project sites.

The suitability of any specific asset for finance is determined by the lender at the time of application and cannot be guaranteed in advance. Lenders will consider factors including the type of asset, its age and condition, and its value in the market. Both new and used construction equipment can potentially be considered for finance, subject to individual lender criteria.

The Main Finance Structures for Construction Businesses

Hire Purchase — your business pays a deposit followed by fixed monthly instalments over an agreed term. At the end of the agreement, ownership of the asset transfers to the business. Hire purchase is widely used in construction for core, long-life assets such as excavators and cranes, where ownership at the end of the term is a priority. Assets purchased through hire purchase may qualify for capital allowances — always seek advice from a qualified accountant regarding the tax treatment applicable to your specific circumstances.

Finance Lease — the lender purchases the asset and leases it to your business for an agreed term. Your business makes regular rental payments and has full use of the asset, but the lender retains legal ownership throughout. Options at the end of the term vary by lender and are set out in the individual agreement — always review these carefully before proceeding. Finance lease can be appropriate for construction businesses that do not require ownership of the asset at the end of the term.

Asset Refinancing — If your construction business owns plant or machinery outright, asset refinancing may allow you to release capital tied up in those assets while retaining full use of them. This can be a practical option for construction businesses that need to improve their working capital position without acquiring new equipment. The availability of refinancing for any specific asset depends on individual lender criteria and cannot be guaranteed in advance.

Used and Second-Hand Construction Equipment

Many specialist lenders in the construction finance market are able to consider used and second-hand plant and machinery, subject to their criteria around the age, condition, and value of the asset. Established brands — such as JCB, Caterpillar, Komatsu, Liebherr, and Volvo — are generally well understood by specialist lenders and may be considered for finance even where the equipment is a number of years old. The specific criteria around used equipment vary between lenders — Percy Finance can discuss what may be available for your specific asset and circumstances.

Tax Considerations for Construction Businesses

The tax treatment of asset finance in construction depends on the finance structure used and the individual circumstances of the business. Assets purchased through hire purchase may qualify for capital allowances including the Annual Investment Allowance, which currently allows businesses to deduct the full cost of qualifying plant and machinery from taxable profits up to £1 million in the year of purchase — though this threshold is subject to change and your specific position will depend on individual circumstances.

The tax treatment of a finance lease differs from hire purchase. In many cases, capital allowances are claimed by the finance provider (lessor) rather than the business, although different rules can apply to certain long funding leases. Lease rentals may be deductible as a business expense, depending on your circumstances. As tax treatment depends on your individual situation, you should always seek advice from a qualified accountant or tax adviser before choosing a finance structure.

Why Use Percy Finance for Construction Asset Finance?

Not all lenders are equally familiar with construction assets, and mainstream banks may apply criteria that do not reflect the specific characteristics of construction plant — including the residual values of specialist equipment, the project-based nature of construction cash flow, or the used equipment market for established plant brands.

As an independent credit broker, Percy Finance can introduce construction businesses to lenders across the market — including those who specialise specifically in plant, machinery, and construction equipment finance. This means your application can be introduced to lenders whose criteria are most appropriate for your specific asset and business profile, rather than being assessed against generic lending criteria.

Percy Finance manages the introduction process from initial conversation through to completion — discussing your requirements, identifying appropriate lenders, and supporting the application process. The Finance & Leasing Association provides useful background on how asset finance is regulated and used across the UK market. Percy Finance is a credit broker, not a lender, and is remunerated by way of a commission paid by the lender — this will always be disclosed to you before any agreement is entered into.

Other Finance Solutions Percy Finance Can Introduce You to

Construction asset finance is one of a wide range of funding solutions Percy Finance can source for businesses across the UK. Whether you need vehicle finance for your fleet, a business loan for working capital, asset refinancing to release capital from equipment you already own, or funding for other business purposes, our team works across the market to identify lenders suited to your individual circumstances. We regularly introduce clients to lenders across the following areas:

Looking for business finance?
Our team at Percy Finance is here to help you compare your options and secure the right funding for your business.