If you are a freelancer then your contract should allow you to do work for others. In which case, your response to this client has to be "Sorry, but my business laptop potentially has data from other clients on it. I can't let you install this monitoring agent without violating my contractual confidentially agreement with those other clients. I always maintain client confidentiality and will do the same for you. If y…
1) Keep all software related to work for their company segregated inside a VM. Then you can install whatever they require without interfering with your main system or potentially exposing data for other clients.
2) If they want a separate physical system, tell them you would be happy to provide it for a fee: an upfront fee for the cost of the system and an ongoing fee for maintenance of it. Be sure to mark everything up as you don't work for free.
Since you're not an employee, you really shouldn't be asking them to provide hardware as (in the U.S., at least) this could create tax problems.