For businesses investing in new equipment, technology or infrastructure, the cost of finance will always matter.
But focusing on the interest rate alone can overlook an equally important question: is the finance structured around the way the investment will actually be delivered and used?
That distinction matters increasingly as capital investment becomes more complex.
A business may be investing across multiple sites. Equipment may require deposits and staged supplier payments months before it becomes operational. A technology investment may need to be refreshed during its useful life. A production line may require installation, testing and commissioning before it generates any economic benefit.
The financing structure needs to recognise those realities.
UK businesses are continuing to invest
The latest data provides an encouraging backdrop.
Office for National Statistics figures show that UK business investment increased by 1.8% in the second quarter of 2026 and stood 5.2% above the equivalent quarter in 2025. The quarterly figure was revised up from the provisional estimate of 1.7%. [ons.gov.uk]
The Finance & Leasing Association (FLA) is also continuing to see growth in the asset finance market. Its latest figures show that asset finance new business increased by 2% in July 2026 compared with July 2025, while new business across the first seven months of 2026 was 6% higher than in the same period last year. [fla.org.uk], [fla.org.uk]
Growth was recorded across a number of important asset classes. Plant and machinery finance increased by 9% in July and commercial vehicle finance by 7%. New lending to SMEs increased by 8%. [fla.org.uk]
Perhaps more significantly, FLA members financed more than a third of UK investment in machinery, equipment and purchased software during 2025. [fla.org.uk]
Asset finance is therefore not a peripheral source of funding. It is an established part of the way British businesses invest.
Start with the investment, not the product
At Capitas, we believe the financing discussion should begin with understanding the investment itself.
What is being acquired?
When will suppliers need to be paid?
When will the assets be delivered?
Will installation and commissioning take place over several months?
When will the investment become operational?
What is its expected economic life?
Are there likely to be future technology upgrades?
How does the proposed investment sit alongside existing bank facilities and other capital commitments?
Only once those questions are understood should the appropriate financing structure be determined.
For a relatively straightforward equipment acquisition, conventional Hire Purchase or Leasing may be entirely appropriate.
For a more complex investment, the answer may involve a combination of structures.
When the investment timetable and finance timetable are different
Consider a manufacturer acquiring a new production line.
The supplier may require a deposit with further stage payments during manufacture. Site preparation may be necessary. The equipment then needs to be delivered, installed, tested and commissioned.
There can therefore be a substantial period between the first cash outflow and the point at which the asset starts contributing to production.
A conventional financing structure that assumes the entire transaction happens on one date may not reflect the commercial reality.
An Interim Finance Facility can potentially fund qualifying expenditure through the implementation period, before transitioning into the longer-term finance once the equipment is installed and commissioned.
The same principle applies to energy infrastructure, major IT deployments, multi-site programmes and complex fit-outs.
The finance timetable should, wherever possible, follow the investment timetable.
Existing expenditure can also be part of the discussion
Financing does not necessarily need to be introduced before an asset is purchased.
A business may deliberately use its own resources to acquire equipment because it wants to control supplier negotiations, delivery and commissioning directly.
Once the equipment is installed and operational, Sale & Leaseback may provide an opportunity to refinance eligible expenditure and release some of the capital already invested back into the business.
Again, this is a structuring decision rather than simply a search for the lowest headline rate.
Finance as part of capital strategy
The strongest businesses do not necessarily use external finance because they lack cash.
They may use it because capital has alternative uses.
They may want to retain liquidity for acquisitions, working capital or further investment. They may want to preserve availability under core banking facilities. Or they may simply believe that a long-life productive asset should be funded over an appropriate period rather than entirely from today’s cash resources.
The appropriate answer will be different for every business.
Tax treatment can also influence investment decisions. Current Government guidance provides a range of capital allowances for qualifying plant and machinery, including the Annual Investment Allowance and, for qualifying expenditure, full expensing or first-year allowances.
Businesses should take their own tax advice because eligibility and treatment depend upon the asset, financing structure and individual circumstances.
Structure before price
None of this suggests that pricing is unimportant.
It is important.
But two facilities with similar headline rates can produce very different commercial outcomes if one reflects the project’s delivery, commissioning and operational timetable and the other does not.
For significant capital expenditure, businesses should therefore consider the financing structure alongside the price.
At Capitas, our starting point is simple:
Understand the investment first. Structure the finance around it second.
That can mean Lease, Hire Purchase, Sale & Leaseback, Loan, Interim Finance or a combination of structures, depending upon the assets, project and commercial objectives.
Because when capital investment is business-critical, the right question isn’t simply:
“What does the finance cost?”
It is:
“Does the finance work in the same way as the investment?”
More information
Capitas Finance works with established businesses to structure finance for equipment, technology, infrastructure and complex capital investment programmes.
Sources
ONS: Business investment in the UK: April to June 2026 revised results [ons.gov.uk]
Finance & Leasing Association: Latest Asset Finance Statistics [fla.org.uk]
Finance & Leasing Association: Asset finance new business grew by 2% in July 2026 [fla.org.uk]
GOV.UK: Capital allowances guidance
