Can installation, delivery and tooling be included in equipment finance for manufacturing?

Short answer: Yes — in many cases delivery, installation and capital tooling can be included within manufacturing equipment finance. Inclusion depends on lender policy, the nature of the equipment and the supplier documentation you provide. UK Business Loans helps manufacturers find the right lenders or brokers to structure deals from £10,000 upwards. Get a Free Eligibility Check

Author: James Carter, Business Finance Specialist — 10+ years arranging asset finance for UK manufacturers. Last updated: 31 October 2025

Quick answer: what lenders typically include in manufacturing equipment finance

Most specialised equipment finance and asset finance products can cover more than the machine price. Lenders commonly accept capitalised costs where there is a direct and essential link to the asset. Typical inclusions are:

• Equipment purchase price (new or eligible used machinery)
• Delivery and standard site installation/commissioning fees
• Capital tooling and jigs that are integral to production and have measurable lifespan
• Training and operator familiarisation (sometimes)
• Manufacturer wiring, software licence set-up where sold with the machine
• Optional warranty extensions and initial service packages (if capitalised)
• VAT (separately — many businesses finance net of VAT and manage VAT by other means)

Everything is subject to lender policy, the asset’s useful life and whether supporting invoices and commissioning evidence are available.

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How installation, delivery and tooling are financed: common structures

There are several ways to include ancillary costs within a financing package. Which is best depends on tax treatment you want, your balance sheet preference and lender appetite.

Hire Purchase (HP) / Asset purchase

Hire Purchase is popular when you want to own the asset at the end of the term. The lender typically funds the full purchase price plus agreed installation and tooling if the invoice clearly shows these are necessary to get the machine operational. Repayments cover capital and interest; once paid you have ownership.

Finance lease / Operating lease

Leases treat the asset as rented. Some leases will include installation and commissioning as part of the lease rental, especially when the supplier is providing a bundled solution. Operating leases can be attractive if you prefer off-balance (accounting treatment depends on standards and lease terms).

Rental, contract hire and blended deals

Shorter rental arrangements may exclude installation and instead require you to pay third-party contractors. However, brokers can often secure blended deals: equipment on finance and installation paid on drawdown or staged payments tied to milestones.

Examples

• New CNC lathe costing £30,000 — lender funds machine + £2,500 delivery & installation on a 5‑year HP.
• Tooling package for a press worth £8,000 — lender includes £6,000 of tooling as capitalised item and treats £2,000 of consumables as excluded.

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What lenders look for when including installation/delivery/tooling

Lenders will assess the whole package. Prepare the following to improve your chances:

• Detailed supplier invoice that separates equipment and service costs
• Installation schedule and commissioning certificate or acceptance criteria
• Manufacturer warranty and evidence of installer qualification
• Asset age and condition (for used equipment) and valuation
• Business trading history and recent management accounts
• Projected useful life and residual value estimates
• Clear explanation of how tooling is used in production (capital vs consumable)
• Site readiness: electrical supply, foundations, ventilation (if applicable)

Tip: get supplier to provide a single consolidated quote with line items and milestone payments — lenders like clarity.

Special considerations for manufacturing businesses

Manufacturers face some unique points when financing installation and tooling.

• Tooling vs consumables: Primary tooling that lasts several years is often capitalised; small consumables (drills, coolant, fixtures that wear rapidly) are usually excluded.
• Site works and civils: Builder’s works (foundations, structural changes) are often not included unless separately valued and secured — these can be financed by a separate commercial loan.
• Staged draws and milestone releases: Large installations may use staged funding — lenders release funds as installation/commissioning milestones are met.
• Training & commissioning: Sometimes included, but confirm if training is capitalised or invoiced as a service.
• VAT and cashflow: Financing VAT can help short-term cashflow but has accounting implications — check with your accountant.

How to present a clear funding package: consolidated invoice + installation timeline + commissioning certificate + warranty — all signed by the supplier.

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Typical costs lenders will and won’t include (examples & red flags)

Below is a practical guide to what commonly passes and what raises red flags.

• Usually included: Delivery, standard installation, primary tooling integral to the machine, initial warranty extension.
• May be included: Site electrics if performed by supplier, commissioning, operator training, software setup (if part of sale).
• Usually excluded: Consumables, general refurbishment, structural building works, cosmetic fit-out, ongoing maintenance consumables.

Red flags for lenders: supplier quotes without breakdowns; large refurbishment costs on used kit without independent valuation; tooling listed as “consumable” with no lifespan evidence.

How UK Business Loans matches you to the right lender or broker

UK Business Loans is a specialist introducer. We take a short enquiry and match your manufacturing funding need to lenders and brokers who best fit the sector and deal size (we typically handle enquiries from £10,000 upwards).

1. Complete our quick enquiry form (2–3 minutes).
2. We review your asset, supplier quote and business basics.
3. We match you to the best-suited partners who can include delivery, installation and tooling.
4. You receive contact and a tailored quote — no obligation and an enquiry will not affect your credit score.

Typical response: most matches result in a broker/lender contact within hours during business days.

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For broader sector finance options see our specialist manufacturing page on manufacturing business loans.

Mini case studies

Scenario A — New press for metal fabrication (HP)
Customer bought a hydraulic press for £85,000. Delivery and professional installation were added (£6,500). Lender accepted consolidated invoice; 5‑year HP covered the machine and installation, preserving working capital and spreading VAT impact.

Scenario B — Precision tooling for subcontract shop (blended finance)
A precision shop bought a machine for £55,000 with a bespoke tooling package of £12,000. The tooling was capitalised where life expectancy >3 years and included in the finance; minor consumable fixtures were paid upfront. Result: predictable monthly cost and improved cashflow.

FAQs

Will financing installation increase my monthly payment?

Yes. Financing installation increases the total financed amount so monthly payments rise proportionally, but it preserves cash that would otherwise be paid upfront and can be cheaper than expensive supplier credit.

Can I finance used manufacturing equipment including installation?

Sometimes. Lenders will look for condition reports, refurbishment costs and a clear supplier/installer invoice. Independent valuations help get used-equipment deals over the line.

What documents do lenders request for tooling costs?

Detailed supplier invoice with line items, technical specs, expected useful life, warranty details and commissioning/acceptance paperwork.

Does adding installation/tooling affect interest rates?

Rates are driven by risk. A transparent package with reputable supplier invoices and good business financials reduces perceived risk and helps secure competitive pricing. Opaque or high refurbishment costs can increase margins.

Are training and commissioning included?

Sometimes. If training is an integral, one-off cost required to make the asset operational, lenders may include it. If it’s ongoing or ad-hoc, it’s more likely to be excluded and invoiced separately.

Next steps & call to action

If you’re buying machinery for your factory and want delivery, installation and tooling included, you don’t need to negotiate all the options alone. Complete our short enquiry and we’ll match you to lenders and brokers who understand manufacturing deals from £10K and up.

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Legal & compliance note

UK Business Loans is an introducer. We don’t lend money or provide regulated financial advice. We connect businesses to lenders and brokers who may make offers subject to credit checks and their terms. Submitting an enquiry will not affect your credit score.

1. Can installation, delivery and tooling be included in manufacturing equipment finance?
Yes — many equipment finance and asset finance lenders will include delivery, installation and capital tooling if supplier invoices, commissioning evidence and the asset’s useful life meet their criteria.

2. How will including installation and tooling affect my monthly payments?
Financing installation and tooling increases the total amount financed so monthly repayments rise proportionally, but it preserves upfront cashflow and can usually be spread over the asset term.

3. Can used manufacturing equipment and its installation be financed in the UK?
Sometimes — lenders will consider used equipment and related installation where independent valuations, condition reports and clear supplier/refurbishment documentation support residual value.

4. Which finance products suit buying machinery — hire purchase, finance lease or rental?
Hire Purchase is common when you want ownership at term-end, finance/operating leases suit balance-sheet or rental preferences, and short-term rental or blended deals work for temporary needs depending on lender appetite.

5. What documents do lenders typically require to include installation and tooling in an equipment finance deal?
Typical requirements are detailed supplier invoices with line items, installation/commissioning certificates, warranty and installer qualifications, asset specifications and recent business financials.

6. Will adding installation and tooling increase my interest rate or financing cost?
Rates are driven by overall deal risk — a transparent, well-documented package and strong business accounts help secure competitive pricing, whereas opaque refurbishment or high-risk items can increase margins.

7. Can VAT be financed as part of equipment and installation funding?
Many lenders can include VAT in a finance package to help short-term cashflow, but businesses often choose to finance net of VAT or use VAT schemes — check accounting implications with your accountant and lender.

8. How quickly can UK Business Loans match my manufacturing finance enquiry to lenders or brokers?
UK Business Loans typically matches enquiries to suitable brokers and lenders within hours on business days after you submit a short, free eligibility check.

9. Will submitting an enquiry to UK Business Loans affect my business credit score?
No — submitting our enquiry form is not a formal application and will not affect your credit score; partner lenders may only run checks if you proceed to an application.

10. What costs do lenders usually exclude from equipment finance for manufacturers?
Lenders commonly exclude consumables, general building or civils works, cosmetic fit-out and ongoing maintenance consumables, which may need separate commercial loans or operating budgets.