TL;DR
Excavator finance allows UK construction businesses to acquire mini, midi or full-size excavators via hire purchase or finance lease over two to seven years. New excavators range from £15,000 to £500,000 or more. Finance approval rates for construction plant are high given strong residual values. AIA of up to £1m is available on hire purchase. Used excavator finance is available for machines up to 15 years old.
Last reviewed: June 2026 | Sources: FCA Register, FLA, HMRC, legislation.gov.uk
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Key Facts Mini excavator: £15,000-£80,000Mid-size excavator: £80,000-£250,000Large excavator: £250,000-£500,000+AIA limit: £1,000,000 |
Why finance rather than buy outright?
Excavators represent one of the largest capital expenditures for UK construction businesses. A new mid-size 20-tonne excavator costs between £80,000 and £200,000, with larger machines exceeding £500,000. Financing spreads this cost over two to seven years, preserving working capital for materials, labour and other operational costs.
Excavators hold their value well. The UK construction plant sector has a strong auction and dealer network. High residual values mean lenders view excavators as strong security, resulting in competitive finance rates and high approval rates. Under hire purchase, businesses can claim AIA on the full excavator cost in year one -- a £100,000 excavator at 25 percent corporation tax generates £25,000 tax relief immediately.
Types of excavator finance
Hire purchase is the most common structure. The business uses the machine from delivery and makes fixed monthly payments over two to seven years. Legal ownership transfers on the final payment. Finance lease suits businesses that want to upgrade machines every three to five years -- the lender retains ownership and the business receives a share of sale proceeds at the end of term. Used excavator finance is available for machines up to fifteen years old from specialist construction plant lenders.
What lenders look for
Construction sector experience and the nature of current contracts are key factors. Lenders prefer businesses with a track record in the sector, evidence of contracts, and operating accounts showing sufficient revenue to service the finance. Two years of filed accounts is the standard requirement for mainstream lenders. Specialist construction plant lenders can sometimes work with one year of accounts or management accounts for strong businesses.
Excavator Finance: New vs Used
| Factor | New Excavator | Used Excavator |
|---|---|---|
| Typical cost | £15,000-£500,000+ | £5,000-£200,000 |
| Finance rates (APR) | 5-10% | 8-18% |
| AIA eligibility | Yes -- full cost | Yes -- full cost |
| Lender appetite | High -- strong residuals | Good for established machines |
| Warranty | Full manufacturer | Limited or none |
| Age limit | N/A | Typically up to 15 years |
| Decision speed | 24-72 hours | 48 hours-2 weeks |
Source: NACFB, specialist lender criteria. Rates as of June 2026.
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Disclaimer This guide is for information only and does not constitute financial advice. Asset finance products vary by lender and business circumstances. Always verify lender details on the FCA Financial Services Register at register.fca.org.uk before applying. Kael Tripton Ltd is an independent editorial publisher and is not regulated by the FCA. |
Frequently asked questions
How much deposit do I need for excavator finance?
Many lenders offer zero deposit excavator finance for established businesses with clean credit. A deposit of 10 to 20 percent is common for businesses with limited credit history or for used machines. A larger deposit reduces monthly payments and improves approval prospects for businesses with adverse credit.
Can I finance an excavator with a new business?
Some specialist construction plant lenders consider businesses trading for six to twelve months, particularly where directors have prior sector experience and the machine is tied to an existing contract. Most mainstream lenders require two years. A specialist broker can identify appropriate lenders for newer businesses.
Is used excavator finance available?
Yes. Used excavator finance is available for machines up to approximately 15 years old. Rates are higher than new machine finance. Most lenders require a professional valuation for used machines above £50,000 and may require a condition report. Machines with full service history attract better terms.
Can I refinance an excavator I already own?
Yes -- this is asset refinance or sale and leaseback. You sell the excavator to a lender and lease it back, releasing capital while continuing to use it. The machine must be unencumbered (no existing finance) to be refinanced.
What happens if the excavator breaks down during the finance term?
Under hire purchase, maintenance and repair costs fall to the business from delivery. Most finance agreements require the business to maintain the asset in good working order and to insure it. Ensure the machine is covered by adequate engineering insurance throughout the finance term.
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Sources FLA: Asset Finance Statistics |
