- Asset finance size
- £20k – £3m per facility
- Premises LTV
- Typically up to 70-75%
- Invoice finance advance
- Usually 80-90% of invoice value
- Term
- 3-10 years for machinery; revolving for working capital
Funding machinery and plant purchases
New or used machinery is typically funded through hire purchase or leasing, spreading cost against the asset's productive life and preserving cash for materials and payroll. Specialist asset lenders understand resale values for CNC machines, presses and production lines, which usually produces better terms than a generalist lender pricing on guesswork.
Working capital tied up in stock and raw materials
Manufacturers often hold significant value in raw materials and work-in-progress that doesn't convert to cash until finished goods are sold and invoiced, sometimes 60-90 days later. Invoice finance against the sales ledger, sometimes combined with a stock finance facility, can release cash tied up at each stage of that cycle rather than waiting for the full cycle to complete.
Premises purchase vs continued leasing
Owner-occupied commercial mortgages let manufacturers stop paying rent into a landlord's asset and instead build equity, often at a total monthly cost close to existing rent once amortisation is spread over 15-20 years. Lenders will want to see stable trading history and sometimes an independent valuation reflecting any specialist fit-out (power supply, floor loading) already in the building.
Export and supply chain finance
Manufacturers selling internationally face extended payment terms and currency risk; supply chain finance, export finance or trade finance facilities can bridge the gap between paying suppliers and being paid by overseas customers, though lender appetite varies significantly by destination market and buyer credit quality.
Energy costs and equipment upgrades
Rising energy costs have pushed some manufacturers toward efficiency-focused capital investment (newer machinery, on-site generation). Asset finance can fund this without a large upfront capital outlay, spreading the cost against the projected energy saving.
Frequently asked
Can I finance used machinery, not just new?
Yes, most asset finance lenders will fund used equipment, though age and remaining useful life affect both the term offered and the rate.
What's the difference between hire purchase and leasing for machinery?
Hire purchase leads to ownership at the end of the agreement; leasing keeps the asset off balance sheet with the option to upgrade, return or continue renting — the right choice depends on tax position and how long you'll use the equipment.
Can invoice finance work alongside asset finance?
Yes, they're commonly combined — asset finance for equipment, invoice finance for the working capital cycle — and many lenders are comfortable with both facilities sitting together.
Do lenders fund manufacturing premises with specialist fit-out?
Yes, though the valuation needs to reflect the specialist elements (three-phase power, reinforced flooring, cranage) — a generic industrial valuation can understate the property's suitability.
How does export exposure affect my finance options?
Lenders assess buyer country and currency risk on export-heavy sales ledgers; some invoice finance and trade finance providers specialise in this and price accordingly.
Fund your next piece of plant or premises
Call 0345 2690628 to talk through machinery, premises or working capital funding.
Related reading
Situations this applies to
Looking for local coverage? Asset Finance by town · All areas we cover