Manufacturing business loans — Can you finance second‑hand machinery?

Short answer: Yes — UK business finance can often be used to buy second‑hand lathes, presses and robotics. The best routes are asset finance (hire purchase, chattel mortgage), leasing or specialist equipment loans. Approval depends on the machine’s age, condition and valuation plus your company’s accounts and cashflow. Get a free eligibility check and tailored quotes to see which lenders will fund your exact kit.

Introduction — why this matters

For manufacturers adding capacity or replacing worn kit, buying second‑hand machinery can save tens of thousands compared with new equipment. But lenders price risk differently for used kit: older machines have lower resale value, potential hidden repair costs and sometimes limited parts availability. That affects deposit requirements, rates and which lenders will consider your case.

UK Business Loans is an introducer — we do not lend. We match businesses seeking finance (minimum typical deals from around £10,000) with lenders and brokers who specialise in asset and equipment finance. Submit a quick enquiry to get matched to the right specialist and receive a fast, no‑obligation response: Get Quote Now — Free Eligibility Check.

Can business loans fund second‑hand machinery?

Yes. Many business finance products are routinely used to buy second‑hand lathes, presses, CNCs and industrial robots. Common routes include asset finance (hire purchase and finance leases), chattel mortgages, secured business loans and specialist equipment loans. Invoice finance or bridging may be used for timing gaps.

• Asset finance is popular because the lender takes a security interest in the equipment, which makes funding for used kit more likely.
• Specialist lenders and brokers understand depreciation and resale markets for manufacturing kit and can place older machines where mainstream banks cannot.

Want to see who can fund your machine? Get Started — Free Eligibility Check.

Which finance options are best for used machinery?

Hire Purchase (HP)

How it works: you pay an initial deposit (sometimes 10–30%), then fixed repayments. Ownership transfers after final payment.

Pros: predictable payments, tax benefits for capital allowances (check with your accountant), straightforward ownership.

Cons: lender risk appetite reduces for very old kit; deposit and rates may be higher.

Finance lease / operating lease

How it works: the lender buys the equipment and you rent it. At lease end you may return, extend, or in some cases buy the kit.

Pros: lower up‑front cost, off‑balance-sheet options possible (accounting treatment varies).

Cons: no ownership unless a purchase option exists; some leases disallow heavy modification.

Chattel mortgage

How it works: similar to a mortgage but for movable assets — you own the equipment while the lender holds a legal charge.

Pros: can suit businesses that want early ownership; lender may be flexible on terms.

Cons: less common than HP; not all lenders offer this.

Secured / unsecured business loans

How it works: a lump sum loan with either security over assets or unsecured. Used where borrower prefers full control of the asset.

Pros: flexible use of funds; no deposit on equipment required if secured by other collateral.

Cons: unsecured loans for equipment typically need strong trading history; rates can be higher.

Specialist equipment lenders

How it works: niche lenders underwrite based on the kit’s resale market and productive life.

Pros: greater willingness to fund older or specialist kit (e.g., robotics, legacy CNCs).

Cons: market is niche — matching your case to the right lender is key.

Quick comparison (visual suggestion for CMS): deposit, ownership, VAT handling, typical term and suitability vary between HP, lease and loan — speak to a broker to compare offers.

Need tailored options? Free Eligibility Check — we’ll match you to the best lenders/brokers.

What lenders look for when financing second‑hand kit

Lenders assess both the machine and your business. Typical checks include:

• Condition & age: service history, maintenance records, hours run, wear parts replaced. Good documentation improves appetite.
• Valuation & resale value: independent valuation or broker valuation showing current market value and second‑hand demand.
• Manufacturer & model: some brands retain value (reliable CNCs, established robot platforms) while obscure models can be harder to fund.
• Business finances: turnover, profitability, cashflow forecasts, historic accounts and bank statements.
• Purpose & productivity: production‑critical kit with clear revenue benefit is easier to place than niche or rarely used machines.
• Location & security: secure premises, insurance and immobilisation reduce risk to the lender.

Note: lenders will carry out their own checks. UK Business Loans introduces you to lenders and brokers who can assess your case quickly. Get Quote Now.

Practical steps to prepare for finance — checklist

Here’s exactly what to have ready — it speeds approvals and strengthens offers:

1. Detailed equipment list: make, model, serial numbers, year, hours run and photos (close-ups of wear points).
2. Service & maintenance history: invoices for parts, recent repairs, calibration records.
3. Independent valuation or broker appraisal, if available.
4. Business accounts (last 2–3 years if available), management accounts and recent bank statements.
5. Cashflow forecast showing how the machine will support revenue/efficiency.
6. Insurance details and installation/location photos.

Here’s the secret: lenders want verifiable evidence. Get the paperwork together and you’ll get faster, better offers. Ready to match with specialists? Start Your Enquiry (2 minutes).

Costs, terms and tax considerations

What to expect:

• Rates: depending on lender, security and machine age; specialist asset finance often priced competitively but older equipment increases cost.
• Deposits: commonly 0–30% — older or niche kit tends toward higher deposits.
• Terms: 1–7 years typical for machinery; robotics and heavy plant sometimes longer with balloon options.
• VAT & accounting: VAT treatment differs between buying and leasing. Capital allowances may be available for qualifying expenditures — check with an accountant. This is general information, not tax advice.

Illustrative example (simplified): a 5‑year‑old CNC priced at £60,000 financed on hire purchase with 20% deposit might have monthly repayments over 4 years — talk to a broker for precise examples for your case.

Want accurate numbers for your machine? Free Eligibility Check.

Alternatives to outright purchase

If buying used isn’t right, consider:

• Short‑term hire or rental.
• Rent‑to‑own or vendor finance through the seller.
• Operational leasing to preserve cashflow.
• Grants or regional manufacturing funds (subject to eligibility).
• Peer‑to‑peer finance or specialist bridging for quick purchases.

UK Business Loans can help identify the most suitable route — Get Quote Now.

Risks and pitfalls to avoid

• Buying without a full service history — hidden repair bills can double your costs.
• Overpaying for obsolete kit with limited spare parts.
• Ignoring safety/certification requirements — non‑compliant machines can halt production.
• Unfavourable finance terms: balloon payments, early repayment penalties or restrictive covenants.
• Poor matching of machine capability to your workload — underpowered kit reduces ROI.

A specialist broker can arrange valuations and match you to lenders experienced in manufacturing equipment to mitigate these risks.

Why use UK Business Loans for used machinery finance?

We make it faster to reach lenders and brokers who understand manufacturing. Our service is free and no‑obligation — complete a short enquiry and we’ll match you to partners who can review your machine and propose suitable finance (deals typically from £10,000 upward). Submitting a form won’t affect your credit score.

If you’re researching manufacturing finance, you may also find our broader guidance on manufacturing business loans helpful.

FAQs

Can I get finance for a 10‑year‑old lathe?

Possibly. Approval depends on condition, parts availability and valuation. Specialist lenders sometimes fund older but well‑maintained machines with strong resale markets. Speak to a broker: Get Started — Free Eligibility Check.

Do lenders require a deposit for used machinery?

Often yes, especially for older kit. Deposits can range from 0–30% depending on lender appetite and asset value.

Can limited companies and growing manufacturers borrow for used machinery?

Yes — companies with sufficient trading history and reasonable accounts are commonly funded. Startups with strong forecasts may find specialist lenders or vendor finance options.

Is VAT recoverable on used machinery?

VAT rules vary depending on whether you buy from a VAT‑registered seller, whether the equipment is sold as part of a business sale, or via hire purchase. Check with your accountant for your specific situation.

How long does approval take?

Initial lender interest can be within hours once matched. Full approvals typically take days to a few weeks depending on valuations, inspections and paperwork.

Will applying affect my credit score?

No — the initial enquiry via UK Business Loans does not affect credit scores. Lenders may perform checks only if you proceed with an application.

Next steps — get a tailored quote

If you’re ready to explore finance for second‑hand machinery, complete our short enquiry and we’ll match you with specialist lenders and brokers who can give a clear, no‑obligation quote. It takes around 2 minutes and won’t impact your credit record: Get Quote Now — Free Eligibility Check.

UK Business Loans is an introducer — we do not lend and do not provide regulated financial advice. We match businesses seeking equipment finance with lenders and brokers who can help. Submitting an enquiry will not affect your credit score; lenders may undertake checks if you progress.

1. Can manufacturing business loans be used to buy second‑hand machinery?
Yes — many manufacturing business loans, especially asset finance products, can fund second‑hand lathes, presses, CNCs and robotics subject to age, condition and valuation.

2. What types of finance are best for funding used machinery?
Asset finance (hire purchase, finance lease, chattel mortgage), specialist equipment loans and vendor or rent‑to‑own arrangements are the most common routes for second‑hand machinery.

3. Will lenders finance older CNC machines or industrial robots?
Some specialist lenders and brokers will fund older but well‑maintained CNCs or robots if service history, spare‑parts availability and resale value are acceptable.

4. How much deposit do lenders usually require for used machinery finance?
Deposits commonly range from 0–30% depending on the machine’s age, condition and lender appetite, with older or niche kit often needing a higher deposit.

5. What documents do I need to apply for manufacturing equipment finance?
Be prepared with equipment details (make, model, serial numbers, photos), service/maintenance history, an independent valuation if available, recent business accounts, bank statements and a cashflow forecast.

6. How long does approval for second‑hand machinery finance typically take?
Initial lender interest can arrive within hours of an enquiry, while full approvals usually take days to a few weeks depending on valuations, inspections and paperwork.

7. Can start‑ups and limited companies borrow for used manufacturing equipment?
Yes — established limited companies with trading history are commonly funded, and start‑ups may access specialist lenders, vendor finance or bridging solutions depending on their case.

8. Is VAT recoverable when buying second‑hand machinery?
VAT treatment varies by sale type and seller VAT status, so check with your accountant for your specific situation before proceeding.

9. Will submitting an enquiry via UK Business Loans affect my credit score?
No — submitting an enquiry to UK Business Loans is a soft enquiry and won’t affect your credit score; lenders may carry out checks only if you progress an application.

10. How does UK Business Loans help me find finance for second‑hand machinery?
UK Business Loans is a free introducer that matches you quickly with FCA‑regulated lenders and brokers who specialise in manufacturing equipment finance so you can compare tailored quotes with no obligation.