Key highlights
- No deposit keeps cash in the business but increases total interest
- Some lenders price nil-deposit deals slightly above deposit deals
- Strong assets and credit still attract competitive rates
- Compare deposit and no-deposit structures before you commit
No-deposit equipment finance means the lender covers the full purchase price, so you keep your cash but borrow a larger amount. That larger balance carries more interest over the term, and some lenders price a nil-deposit deal slightly higher. Strong, asset-backed applicants may still start from around 6.55% p.a., subject to lender assessment. Whether zero deposit is worth the extra cost depends on your cash flow. Overdrive compares 80+ banks and non-bank lenders so you can weigh no-deposit against deposit options side by side.
What no-deposit finance actually means
With a no-deposit or 100% finance structure, the lender funds the entire purchase price and you make no upfront contribution beyond any fees. This preserves working capital, which can matter when you would rather keep cash for stock, wages or a rainy day. It is commonly available for popular, easily resold equipment where the lender is comfortable with the security. Newer assets and stronger applicants see it most readily. It is not universal, though: some lenders or asset types require a contribution, so availability is confirmed case by case rather than promised on every deal.
How it affects your costs
The trade-off is simple. Financing 100% means a larger loan balance, and interest is charged on that balance, so you generally pay more interest across the term than if you had put money down. On top of that, some lenders view a nil-deposit deal as slightly higher risk and price it marginally above an equivalent deposit deal. The rate itself still depends on the asset, your credit and the term. Strong applications may start from around 6.55% p.a., while older assets, low-doc files or weaker credit are priced higher. All figures are indicative and subject to lender assessment.
When no deposit makes sense
Zero deposit can be the right call when cash is better used elsewhere in the business, or when the equipment will start earning quickly and effectively pay for itself. If a machine lets you take on more work immediately, keeping your cash liquid may be worth the extra interest. It can also help newer businesses that are asset-rich in opportunity but light on spare cash. The key is to compare the total cost of a no-deposit deal against putting some money down, then decide which structure genuinely serves your cash flow rather than defaulting to one out of habit.
When a deposit is worth it
If you have surplus cash and no better use for it, a deposit usually lowers both the balance and the total interest, and can sometimes sharpen the rate. It also reduces the risk of owing more than the asset is worth early in the term. A trade-in works the same way as cash. The sensible approach is to model a couple of scenarios: nil deposit, and perhaps ten or twenty percent down, then see how the repayments and total cost compare. Small changes to the deposit can shift the numbers more than people expect over a multi-year term.
How to get the sharpest deal
Because lenders treat nil-deposit deals differently, comparing matters. One funder may load the rate, another may not, and a third may prefer a small contribution in exchange for a better price. Applying blindly to a single lender rarely surfaces the best structure. Overdrive reviews your goals once and approaches the lenders whose appetite fits, then presents the options clearly. Same-day pre-approval and 24-48 hour settlement may be available for eligible applicants. Having recent bank statements and asset details ready helps a broker return realistic figures quickly, so you can compare the nil-deposit and deposit versions of the same deal without delay.
No-deposit finance is a genuinely useful tool, provided you understand you are trading a little extra interest for kept cash. The smart move is to see both structures priced before you sign. Overdrive's dedicated broker, Simon Kendrick, compares 80+ banks and non-bank lenders on one application and can show you no-deposit and deposit options together. Request a free quote and pick the structure that suits your business, not the lender's.
Frequently Asked Questions
Is no-deposit equipment finance more expensive?
Usually a little. You borrow the full price, so you pay interest on a larger balance and typically more over the term. Some lenders also price nil-deposit deals slightly higher. The gap varies by lender and asset, which is why comparing both structures before committing is worthwhile.
Can any business get 100% finance?
Not always. It is most readily available for popular, easily resold assets and stronger applicants with solid credit. Older equipment, specialised gear or weaker files may need a deposit. Availability and rate are confirmed case by case and remain subject to lender assessment rather than guaranteed.
Should I put a deposit down if I can afford it?
It often lowers your total interest and can sharpen the rate, so if you have surplus cash and no better use for it, a deposit frequently pays off. But keeping cash for working capital can matter more. Compare both scenarios and choose what suits your cash flow.
Does a trade-in count as a deposit?
Generally yes. An eligible trade-in reduces the amount you need to borrow in the same way cash does, which can lower your balance and total interest. The lender assesses the trade-in value as part of the deal, so confirm how it is treated before finalising anything.
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