Machinery finance · Manufacturing
Machinery finance for manufacturing
Manufacturing finance is capital equipment lending combined with working capital for raw materials, covering CNC machines, presses and packaging lines as well as the gap between buying stock and being paid for finished goods.
How machinery finance works for manufacturing
A CNC machining centre or fibre laser is a five-to-ten-year asset and should be financed like one. Machinery finance funds the purchase against the machine itself, and specialist lenders will handle the awkward parts of an imported capital purchase: a deposit to the manufacturer, a progress payment before shipping, and final settlement once the machine is installed and commissioned in your factory. Repayments starting at commissioning rather than at order matter enormously when lead times run six months. Send the proforma invoice and shipping schedule with the application.
The cash-flow pattern we plan around
Cash out for raw materials, then weeks of work in progress, then 30–60 day terms on finished goods — a cycle that lengthens as the business grows.
What manufacturing typically fund
- CNC machines, lasers and press equipment
- Packaging and materials handling lines
- Raw materials and imported componentry
- Forklifts and factory logistics
- Factory fit-out, power upgrades and compliance works
Machinery finance for manufacturing: the numbers
| Typical amounts | $20,000 – $3,000,000 |
|---|---|
| Term | 12–84 months |
| Indicative rates | 7.2% – 16.5% p.a. |
| Repayments | Monthly |
| Speed | 24–72 hours for low-doc, up to a week for full-doc or private sales |
| Documents manufacturing usually need | ABN, GST registration and two years of financials · Supplier quote or proforma invoice for the machine · Debtor ledger and aged receivables report |
Rates are indicative, change without notice and depend on the lender, product, asset, term and your credit profile at the time of application. They are not an offer of finance. Comparison rates, where shown, are true only for the example given.
Key terms
Manufacturing equipment finance
Manufacturing equipment finance is secured lending for production machinery such as CNC machining centres, laser cutters and packaging lines, often structured to fund supplier progress payments and to commence repayments on commissioning.
Working capital cycle
The working capital cycle is the time between paying for raw materials and receiving payment for the finished goods made from them, during which the business funds the value of that inventory itself.
What is machinery finance?
Machinery finance is asset-backed business lending for plant and production equipment such as excavators, loaders, telehandlers, CNC machines and packaging lines. The machine secures the loan, usually under a chattel mortgage or finance lease.
Can you finance used machinery?
Yes. Most specialist lenders fund used plant, including auction and private-sale purchases. Machine hours, service history and a clear PPSR search matter more than age alone, though many lenders cap the asset’s age at the end of the term.
How do hours affect machinery finance?
Hours are the primary measure of a machine’s remaining life and resale value. High-hour machines attract shorter terms, larger deposits and higher rates because the security depreciates faster and sells for less.
Questions from manufacturing
How do manufacturers finance machinery that is built to order overseas?
Progress payments to the manufacturer are funded through a trade finance facility or by the equipment lender, and the whole amount converts to a chattel mortgage when the machine is installed and commissioned. Tell your broker the payment schedule early so the structure is in place before the deposit is due.
How do manufacturers fund raw materials and work in progress?
Trade finance pays suppliers for raw materials with 90 to 180 days to repay, invoice finance advances against finished goods invoices on 30 to 60 day terms, and a line of credit fills the gaps. Together they fund the whole cycle from materials to payment, and the facilities grow with turnover.
Can I release capital from machinery I already own?
Yes. A sale and leaseback or refinance secured on unencumbered CNC machines, presses, lasers and lines can release 60 to 80 per cent of their valuation for working capital or expansion, with the machines staying on your floor. Lenders like recognised brands with strong secondary markets.
Does a supply contract help a manufacturing finance application?
Yes. A contract or purchase orders from a major customer for the product the machine will make are strong evidence of earnings and often move an application from a deposit to no deposit, or from full financials to a lighter assessment. Include them with the machine quote.