Can engineering firms combine asset finance and invoice finance in one facility?

Quick summary: Yes — many engineering firms can combine asset finance (to buy or lease machinery, plant or vehicles) and invoice finance (to release cash tied up in unpaid invoices) into a single, tailored funding package. Whether this is possible and sensible depends on lender appetite, security arrangements, your company accounts and credit profile. A combined facility can simplify administration, reduce duplicate fees and keep production moving while freeing working capital. For a quick check of eligibility and matched quotes, start a Free Eligibility Check now: Get a Free Eligibility Check. The enquiry is free and no obligation — it’s only used to match you with lenders/brokers.

---

---

Quick answer — is it possible?

Short answer: yes — in many cases. Engineering SMEs regularly combine asset finance (hire purchase, finance lease or operating lease for machines, plant and vehicles) and invoice finance (factoring or invoice discounting) into a single funding package or coordinated set of facilities. Lenders or brokers will only agree the structure after reviewing your accounts, contracts pipeline, debtor quality and the assets involved. If you want to explore options, start a Free Eligibility Check: Get Quote Now.

What are asset finance and invoice finance?

Asset finance

Asset finance helps you acquire essential equipment without draining cash reserves. Typical forms include:

• Hire Purchase — you pay fixed monthly instalments and own the asset at the end (subject to terms).
• Finance Lease — the lender retains ownership while you pay to use the asset for an agreed term.
• Operating Lease — off‑balance-sheet rental style agreements for shorter-term use.

For engineering firms, asset finance is commonly used for CNC machines, presses, fabrication lines, testing rigs and specialist vehicles.

Invoice finance

Invoice finance unlocks cash tied up in unpaid invoices so you can meet payroll, buy materials and bid for new work. Two common types:

• Factoring — the funder buys or advances against invoices and may manage collections.
• Invoice discounting — you retain control of collections while borrowing against outstanding invoices.

Both product types improve liquidity quickly — ideal when large contracts create long payment cycles.

Why engineering firms often want both

• Keep production moving — use asset finance to acquire machinery without large capital outlay.
• Bridge payment cycles — invoice finance smooths cashflow while you wait for milestone payments.
• Reduce funding fragmentation — one coordinated facility can reduce duplicated admin and speed reporting.
• Support growth — buy equipment and fund increased material costs at the same time.

Put simply: assets keep you productive; invoice finance keeps you paid. Combining both addresses capital and working capital together.

How a combined facility can be structured

There are three typical approaches to combining asset and invoice finance:

Single-lender integrated facility

Some specialist lenders or banks offer both asset and receivables products, and can package them under a single legal facility. Benefits include:

• Simpler documentation and a single point of contact.
• Potential for blended pricing and streamlined covenants.

When it works best: when your business has strong trading history, stable debtor book and the asset values are clear.

Multi-product facility via a broker

A broker can assemble a package from different specialist providers and present it as one coordinated solution. This is flexible where no single lender meets all needs. Advantages:

• Access to specialist asset financiers and invoice funders with targeted appetite.
• Competitive quotes to compare structure, pricing and terms.

Cross-collateral and security arrangements

Security is the technical heart of combined facilities. Lenders will want clarity on:

• What assets are charged (machinery, vehicles, plant).
• Which invoices or debtors are assigned or charged and whether debtor notification is allowed.
• Priority in enforcement — who gets paid first if the business fails.

Negotiation point: avoid unintended cross‑collateralisation where possible. If cross‑security is used, ask for clear priority and exit provisions.

Who typically provides combined facilities?

Providers include specialist asset finance houses, invoice funders, challenger banks, merchant banks and specialist commercial brokers who combine products. Each has different risk appetite — asset financiers favour strong collateral and resale values; invoice funders focus on debtor quality and contract terms.

Eligibility, typical terms and lender requirements for engineering firms

Lenders look for a mix of the following:

• Company trading history — typically at least 12 months, though experienced brokers can sometimes place younger businesses.
• Turnover and margin stability — clear turnover evidence and gross margin that supports repayments.
• Accounts and management information — recent management accounts, aged debtor reports, order book and asset list.
• Asset type and condition — marketable machines and vehicles gain stronger support than bespoke one‑off kit.
• Debtor quality — strong, creditworthy customers and clear contract terms improve invoice finance terms.

Typical terms: asset finance arrangements often run 2–7 years (depending on asset life); invoice facilities are typically flexible, sized as a % of eligible invoices. Minimum deal sizes usually start around £10,000 upwards for asset finance and similar thresholds for invoice facilities depending on provider.

Practical examples — two short engineering firm case studies

Case study 1 — CNC replacement + invoice discounting

A Midlands fabrication shop needed a new CNC press (£120,000). At the same time it had a £250,000 contract with staged payments and long supplier lead times. Solution: hire purchase for the CNC over 4 years and an invoice discounting facility to release cash against contract invoices. Result: the firm avoided large up‑front capital spend, paid suppliers on time and used invoice advances to manage the materials cost. Administration was simplified by one broker coordinating both products and the business maintained a positive cash position throughout the contract.

Case study 2 — Fleet renewal + factoring for growth

A plant services company expanding into new regions needed a 10-vehicle fleet (£180,000) and predictable working capital for rapid growth. Solution: operating leases for vehicles combined with factoring to accelerate cash flow from new commercial contracts. The broker negotiated a package where reporting was consolidated and the funder advanced a high percentage against approved invoices. The business scaled operations without disrupting cashflow.

Pros, cons and what to watch out for

Pros:

• Streamlined admin, fewer separate lender relationships.
• Potentially lower combined fees and improved pricing.
• Better cashflow predictability and equipment availability.

Cons and risks:

• Cross‑default and cross‑collateral clauses — a default on one product can affect the other.
• Priority disputes — understand ranking of charges on assets and receivables.
• Complex covenants — watch for restrictive covenants that limit trading flexibility.
• Fees and notices — some funders charge notification or exit fees for debtor notification or early settlement.

Key negotiation points: security priority, events of default, interest resets, notice periods and detailed lists of excluded assets or exempted debtors.

Preparing your business to apply — checklist

Documents and data that speed decisions:

• Latest 12–24 months management accounts and year‑end accounts.
• Debtor ageing report and sample invoices / signed contracts.
• Asset schedule with purchase dates, cost and current condition/photos.
• Business plan or contract pipeline for the next 6–12 months.
• Bank statements (usually 3–6 months) and director ID/verification details.

Tip: prepare a clear one‑page summary that sets out what you want the combined facility to achieve (e.g., acquire machine X + release Y% of invoices for contract Z).

How UK Business Loans can help you find the right lender or broker

We don’t lend — we introduce. If you’re an engineering company considering a combined facility, we can:

• Match your enquiry to specialist brokers and lenders with experience in engineering asset and invoice funding.
• Collect a short set of details once and pass them to a handful of relevant partners so you get competitive quotes.
• Help you compare structures, fees and likely timescales so you can decide with confidence.

Start the process with a Free Eligibility Check: Get Started — Free Eligibility Check. The enquiry form is only used to match you with lenders/brokers — it is not an application. Free & no obligation.

For more reading on finance options that suit engineering firms see our industry overview on engineering business loans.

Frequently asked questions

Next steps — get a Free Eligibility Check

Want to see if a combined asset + invoice finance solution could work for your engineering business? Complete a short enquiry and we’ll match you to specialists who can help. The enquiry is free, quick and no obligation: Free Eligibility Check — Get Quote Now.

Important: UK Business Loans is an introducer — we do not lend or give regulated financial advice. The enquiry form is for matching purposes only and is not an application. Your information will be used to connect you with lenders and brokers who may contact you to discuss quotes. We respect your privacy and treat data securely.

---

1. Can engineering firms combine asset finance and invoice finance in one facility?
Yes — many engineering SMEs can combine asset finance (machinery, plant or vehicles) and invoice finance (factoring or invoice discounting) into a single or coordinated funding package depending on lender appetite, accounts and security arrangements.

2. How much does a combined asset and invoice finance facility cost?
Costs vary by lender, deal size and risk profile, but a single negotiated package can reduce duplicated fees so it’s essential to compare multiple quotes.

3. How long does it take to arrange combined asset and invoice finance?
Smaller, straightforward combined deals can complete in days to a couple of weeks, while bespoke security and complex facilities may take several weeks.

4. What documents do engineering firms need to apply for combined asset and invoice finance?
Typical requirements include recent management accounts, debtor ageing reports, sample invoices or contracts, an asset schedule (with photos/values) and recent bank statements.

5. Who provides combined asset and invoice finance for engineering businesses?
Specialist asset finance houses, invoice funders, challenger banks and brokers that package multi‑product solutions typically provide or arrange combined facilities.

6. Can combining finance affect my other lending or put my assets at risk?
Yes — combined facilities commonly include cross‑default or cross‑collateral clauses, so you must understand security priority, enforcement and exit provisions before signing.

7. What deal sizes are typical for combined asset and invoice finance?
Minimums vary by provider but many asset and invoice finance facilities start around £10,000, with larger, bespoke facilities available for established engineering firms.

8. Will submitting an enquiry via UK Business Loans affect my credit score?
No — completing a Free Eligibility Check on UK Business Loans is not an application and won’t affect your credit score; lenders may only perform checks if you proceed.

9. Is it better to use a broker or approach a single lender for a combined facility?
A broker can access specialist funders and competitive quotes for bespoke needs, while a single‑lender integrated facility can simplify documentation if their terms suit your business.

10. How can UK Business Loans help me find the right combined asset and invoice finance?
UK Business Loans matches your short, free enquiry with FCA‑regulated lenders and brokers who specialise in engineering asset and invoice funding so you can compare suitable offers with no obligation.