Manufacturing Business Loans in the UK — Typical Rates & Terms

Short answer: Indicative ranges for manufacturing finance arranged through our partner lenders and brokers are: asset & equipment finance around 3%–12% p.a.; secured term loans 6%–20% p.a.; unsecured loans 8%–25%+; invoice finance fees 0.5%–2.5% per invoice; and short-term bridging or revenue-based solutions can be substantially higher. To get tailored, indicative pricing for your business complete a Free Eligibility Check and we’ll match you to specialist lenders and brokers. Get Quote Now — Free Eligibility Check

We are an introducer — not a lender. The enquiry form is informational only (it is not an application) and is used to match your business to the most suitable lenders or brokers. Our matching service is free and without obligation.

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Contents

• What “typical” means
• Typical rates by finance type
• Typical loan sizes & terms
• What affects the rate & terms
• Common financing options for manufacturers
• Security, guarantees & covenants
• Illustrative case studies
• How UK Business Loans helps
• Documents to prepare
• FAQs
• Next steps

What “typical” means — illustrative ranges and why they vary

All rate and term ranges on this page are indicative only. Final offers depend on multiple factors including lender appetite, the security offered, the age and condition of assets, company performance, director credit profiles and the wider economic environment. Use the ranges below as a planning guide — the quickest way to get a realistic quote is to start the Free Eligibility Check.

Typical rates by finance type (indicative only)

Indicative rates, typical use-cases and term lengths

Finance type	Indicative rate / fee	Typical use-case	Typical term
Asset finance (HP / finance lease)	3%–10% p.a. (fixed/competitive)	Purchase of new/used machinery, CNC, production lines	2–7 years
Equipment & machinery loans	4%–12% p.a.	Buy specific plant, retrofit lines	2–7 years (linked to asset life)
Secured term loans	6%–20% p.a.	Premises, large plant, expansion (usually secured)	1–10 years (longer if property-secured)
Unsecured business loans	8%–25%+ p.a.	Working capital where security is limited	1–5 years
Invoice finance / factoring	0.5%–2.5% per invoice + fees (effective annual cost varies)	Free up cash from outstanding invoices	Ongoing / facility-based
Merchant cash advance / revenue-based	Equivalent APR typically 20%–80%+	Short-term cash tied to sales/revenues	Short-term, daily/weekly repayments
Short-term bridging / development finance	0.5%–1.5%+ per month	Fast purchases, development gaps	1–24 months
Refinance / hire purchase refinance	Varies — based on asset value & age	Replace or restructure existing asset debt	Depends on lender

Quick note: the most cost-effective option for machinery is often asset finance because the asset itself acts as security. For complex funding (larger borrowings, property security or weaker credit), specialist brokers can usually source better-priced offers. Get Quote Now — Free Eligibility Check

Typical loan sizes & terms for manufacturing businesses

• Small working capital: from £10,000 up to £150,000 — terms 6–36 months.
• Mid-range loans: £150,000–£1.5m — terms 1–7 years depending on security.
• Large finance for plant/premises: £1.5m+ — often secured; terms 5–15 years.
• Equipment finance: typically up to the full cost; terms aligned to asset life (2–7 years).
• Invoice finance lines: commonly start around £50k but depend on invoice book quality.

Payment flexibility is common: seasonal payment schedules, interest-only periods for short terms, and bespoke amortisation profiles can often be negotiated to match manufacturing cashflows.

What affects the rate & terms?

Here are the key underwriting factors lenders and brokers consider — and practical tips to improve offers.

• Company performance: age, turnover, margins and profitability. Strong management accounts help.
• Credit history: business and director credit profiles. Fix admin credit issues where possible.
• Security available: property, machinery, stock — more security normally lowers rates.
• Asset type & age: newer assets attract better asset finance terms.
• Order book & contracts: confirmed long-term contracts reduce perceived risk.
• Sector risk: certain manufacturing sub-sectors are higher risk and price accordingly.
• Owner equity / deposit: a larger deposit can reduce borrowing cost.

Quick tip: prepare clear asset quotes, recent management accounts and an order book summary before applying — it materially speeds decisions and improves pricing.

Common financing options for manufacturers — which suits you?

Here’s a quick guide so you can pick the right route before you enquire.

• Asset finance / leasing: Spread cost of new or used machinery without tying up cash; ideal when you want to own at term (HP) or simply use (lease).
• Equipment loans / hire purchase: Ownership at the end of agreed repayments (HP) — good when you want the asset on the balance sheet.
• Invoice finance / factoring: Unlock cash from invoices to cover supplier costs and payroll when customers take long to pay.
• Commercial mortgages / property-secured loans: For premises purchase, larger capex or major expansions — usually longer terms and lower rates.
• Bridging / development finance: Fast short-term funding for site purchases or contract fulfilment while awaiting longer-term funding.
• Specialist lenders & grant-ready finance: Options built around green manufacturing improvements or automation — these can be blended with grants.

Security, guarantees and covenants you should expect

Typical security and legal items:

• Fixed or floating charges and debentures over business assets.
• Retention of title or hire purchase retaining ownership until final payment.
• Charges over property for larger loans.
• Director personal guarantees are commonly requested — negotiate scope and caps where possible.
• Common covenants: maintain certain cashflow/interest cover ratios, deliver monthly management accounts, and restrictions on additional borrowing or asset disposal.

What this means for you: expect detailed lender paperwork for larger or secured deals. Specialist brokers can often negotiate more flexible covenant packages.

Illustrative scenarios (indicative only)

1) Small engineering shop — CNC purchase

Requirement: £85,000 for a CNC machine. Structure: asset finance (HP). Indicative rate: 6.5% p.a. over 5 years. Indicative monthly repayment: ~£1,657 (illustrative only). At term, ownership transfers under HP.

2) Mid-size manufacturer — premises & expansion

Requirement: £750,000 to buy and fit a larger production unit. Structure: secured term loan with property security. Indicative rate: 7.5% p.a. over 7 years. Deposit and valuation required; covenants likely.

3) Manufacturer with long payment terms

Requirement: Cash flow to bridge 60-day customer payment terms. Structure: invoice finance releasing 80–90% of invoice value. Indicative blended cost: depends on fees & discounting but typically within the table ranges above.

All figures are illustrative only. To get realistic numbers for your business Start Your Enquiry — Free Eligibility Check.

How UK Business Loans helps — our matching process

We make the process fast and simple:

1. Complete a quick enquiry form (about 2 minutes) — this is informational only, not an application.
2. We match your case to specialist lenders and brokers that understand manufacturing.
3. Matched partners contact you to discuss options and provide indicative quotes.
4. Compare offers and choose the best fit — there’s no obligation to proceed.

Get Quote Now — Free Eligibility Check and expect contact from matched providers, often within hours.

What you’ll need to apply / documents to prepare

• Company details (registration number, address)
• Latest 12–18 months management accounts and bank statements
• Turnover & profit figures; VAT returns if relevant
• Cashflow forecast (if available) and asset quotes/valuations
• Customer contracts / order book evidence
• Director details and ID (for KYC when progressing)
• Property information if security is offered

Having these ready speeds lender responses and usually improves terms.

FAQs

Will applying affect my credit score?

Submitting a short enquiry via our matching form does not affect your credit score. Lenders may carry out checks later if you progress an application.

How quickly can I get a quote?

After you submit our short form, matched lenders/brokers often contact businesses within hours to provide indicative pricing.

Do you lend directly?

No. UK Business Loans introduces your business to lenders and brokers — we do not lend ourselves or provide regulated financial advice.

What if I have imperfect credit?

We work with a broad panel. Some lenders specialise in cases with weaker credit profiles; complete the enquiry so we can match you appropriately.

Can my business apply?

Yes — we work with incorporated businesses in manufacturing seeking loans or finance from around £10,000 upwards.

Are the rates fixed or variable?

Both options exist. Some lenders offer fixed-rate products; others offer variable pricing linked to reference rates — check the lender quote for details.

Do lenders perform credit and identity checks?

Yes — lenders/brokers may carry out credit and ID checks if you progress to an application stage.

How long do lenders take to respond once matched?

Often within hours; complex or larger transactions may take days to receive formal offers.

Next steps — get a tailored quote

Rates and terms vary by business and financing type. The fastest way to get indicative pricing specific to your manufacturing business is to complete the short enquiry form. It’s free, non-binding and helps us match you to the best lenders or brokers for your needs. Start Your Enquiry — Free Eligibility Check

Related pages: Home · Asset Finance · Invoice Finance · Equipment Finance · How it works · FAQ · Contact

For detailed industry-specific guidance see our dedicated page on manufacturing business loans which explains typical lender appetite, common security structures and specialist solutions (indicative information).

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Last updated: 31 October 2025

Legal & compliance: UK Business Loans is an introducer — not a lender. We do not provide regulated financial advice. Our service is free and without obligation. All interest rates, repayments and examples shown are indicative only and subject to lender eligibility checks. Lenders/brokers contacted may carry out credit and identity checks and may require security or personal guarantees if you progress an application.

1. What types of finance can UK manufacturing businesses access?
– UK manufacturers can access asset finance and equipment loans, secured and unsecured term loans, invoice finance/factoring, merchant cash advances/revenue-based finance, short‑term bridging/development finance and refinance options.

2. What interest rates and fees should manufacturers expect?
– Indicative ranges are asset/equipment finance 3%–12% p.a., secured term loans 6%–20% p.a., unsecured loans 8%–25%+, invoice finance 0.5%–2.5% per invoice, merchant cash advances often 20%–80%+ APR and bridging typically 0.5%–1.5%+ per month.

3. How much can I borrow and what are typical loan terms for manufacturing projects?
– Typical amounts range from small working capital loans of £10,000–£150,000 (6–36 months), mid-size loans £150,000–£1.5m (1–7 years), to large plant/property finance £1.5m+ (often 5–15 years), with equipment finance normally 2–7 years aligned to asset life.

4. Will submitting the UK Business Loans enquiry affect my credit score?
– No — the short, free enquiry/eligibility check is informational only and won’t affect your credit score, although lenders may carry out checks later if you progress an application.

5. What documents should I prepare before applying for manufacturing finance?
– Have company details, the latest 12–18 months management accounts and bank statements, turnover/profit figures or VAT returns, a cashflow forecast, asset quotes/valuations, customer contracts/order book evidence and director ID ready.

6. Can I get finance with imperfect business or director credit?
– Yes — UK Business Loans works with a broad panel that includes lenders who specialise in imperfect credit profiles, so complete the enquiry to be matched to appropriate partners.

7. Do you lend directly or provide regulated financial advice?
– No — UK Business Loans is an introducer that matches you to FCA-regulated lenders and brokers; we do not lend money or provide regulated advice.

8. How quickly will I receive indicative quotes after completing the Free Eligibility Check?
– Matched lenders and brokers often contact businesses within hours with indicative pricing, while larger or more complex transactions can take several days for formal offers.

9. What security, guarantees and covenants should manufacturers expect to provide?
– Expect fixed or floating charges, retention of title or HP ownership, property charges for larger loans, and commonly director personal guarantees and covenants such as reporting requirements and borrowing restrictions.

10. Is asset finance the best option to buy machinery for my manufacturing business?
– Often yes — asset finance is usually the most cost-effective route to fund machinery because the equipment provides security and terms are aligned to the asset’s useful life.