Manufacturing Finance: Capital Tied Up in Machines and Invoices
Most manufacturers we speak to have working capital stuck in two places they cannot touch: unpaid invoices from customers on 60-day terms, and machinery bought out of reserves that should have stayed liquid. We are a broker, so we place your deal with the lender whose appetite fits it, whether that is asset finance against your plant, invoice finance against your debtor book, or trade finance to cover an import order.
£200bn
UK manufacturing output
130,000+
Manufacturing SMEs
The cash flow mechanics of manufacturing are simple and brutal. You buy raw materials, you pay wages, you run the line, and then you wait. Customers on 30 to 90 day terms mean your finished goods sit on someone else's balance sheet while you fund the next production run yourself. Meanwhile the equipment needed to stay competitive costs serious money; a CNC machining centre alone can run to £250,000, and most lenders want it repaid over 36 to 60 months. We work with manufacturers in precision engineering, food production, plastics, textiles, metal fabrication, and packaging. The lenders who do this properly understand production cycles, read an order book as a proxy for future revenue, and can value secondhand industrial kit. No broker can promise you a rate. The lender sets that once it has seen your management accounts, asset schedule, and debtor book. Our job is to get your file in front of the lender most likely to say yes and to package it so the answer comes back quickly.
Common Challenges in Manufacturing
Working capital locked in unpaid invoices
A manufacturer turning over £5m on 60-day terms can have £800,000 or more sitting in unpaid invoices at any one time. Invoice finance releases most of that within a day of you raising the invoice, then collects from your debtors in the background so your ledger keeps funding itself.
Equipment that costs more than a year's profit
A new press, laser cutter, or injection moulding machine can cost more than your annual net profit. Buying outright drains liquidity you may need elsewhere. Asset finance spreads the cost over the working life of the kit, and because the asset itself is the security, terms are usually keener than unsecured borrowing.
Paying overseas suppliers before you get paid
Sourcing materials or components from abroad usually means paying before the goods land. Trade finance settles the supplier; you repay once the goods are received and processed or sold. It is how most manufacturers with international supply chains manage the gap between shipping and revenue.
R&D credit delays draining cash
If you are investing in process improvement or new products, you are probably filing HMRC R&D claims, and those can take months to land. An R&D advance releases most of the expected credit now against the pending claim, so the cash arrives when you are actually doing the work rather than months later.
Finance Solutions for Manufacturing
We work with specialist lenders to find the right product for your business.
Asset Finance
Hire purchase or finance lease for CNC machines, presses, and full production lines. The asset secures the borrowing. Terms typically run 24 to 60 months.
Learn moreInvoice Finance
Release up to 90% of your B2B invoice value as soon as you raise it. The facility grows with your turnover, so it scales as you win larger orders rather than capping you.
Learn moreTrade Finance
The lender pays your overseas supplier directly. You repay once goods are received, processed, and sold, on terms structured around your production cycle.
Learn moreRevolving Credit
A standing credit line for raw material purchases, wages, or bridging the gap between production runs and payment. Draw it, repay it, draw again.
Learn moreR&D Tax Credit Advance
With a submitted or near-complete HMRC R&D claim, an advance releases most of the expected value now and is repaid when HMRC pays.
Learn moreWork out your numbers
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Frequently Asked Questions
Can I finance a single machine, or does it have to be a full production line?
Single assets are fine. Asset finance deals run from around £10,000 for smaller kit up to several million for a full line installation. The lender will want the asset's age, condition, and resale value; newer branded kit from known manufacturers tends to attract better terms than obscure secondhand equipment with no clear resale market. No broker can guarantee a rate, but a well-documented asset with a clear valuation gets a cleaner decision. Funding depends on your business and the lender's appetite.
How does invoice finance actually work for a manufacturer?
You raise an invoice to your customer, send a copy to the invoice finance provider, and they release typically 80 to 90% of the face value the same or next working day. When your customer pays at 60 days, the provider takes its fee and releases the balance to you. Most providers offer this on a confidential basis, so your customers see nothing different. A new facility usually takes around 5 to 10 working days to set up.
What is trade finance and when does it make sense?
Trade finance is for manufacturers who have to pay overseas suppliers before they can recoup the cost from their own customers. The lender pays your supplier directly, often via a letter of credit or direct payment, and you repay on agreed terms once the goods are received. It removes the cash flow gap created by supplier lead times and international payment demands. It is most relevant when you are importing raw materials or components and the supplier will not extend credit.
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