Refinance Machinery for Engineering Businesses — Free Quote

Short answer: Yes — in most cases engineering businesses can refinance existing machinery to free up working capital. Common routes include sale & leaseback, asset-secured refinancing, hire purchase and loan consolidation. Whether refinancing is practical for your business depends on the type, age and marketability of the equipment, outstanding finance, and your company finances. Read on for a full, practical guide and a simple next step to get matched with specialist lenders and brokers via a Free Eligibility Check.

At a glance — key takeaway + quick CTA

Yes — refinancing machinery is a practical way for engineering companies to unlock cash without interrupting production. Best options are sale & leaseback for high-value assets and secured asset loans for firms wanting to retain ownership. Typical finance sizes start from around £10,000 and upwards. Get a Free Eligibility Check and fast quotes from specialist lenders and brokers: Get Quote Now — free and no obligation.

Can I refinance current machinery to free up cash flow?

Usually yes. Lenders and asset buyers value engineering equipment — CNC machines, presses, injection moulding tools and other standard kit have resale markets and therefore can secure finance. The key requirements are that equipment must be in reasonable condition, have identifiable market value, and your company must meet basic trading and financial criteria.

Why it works for engineering firms: machinery often retains tangible resale value, and specialist asset financiers and lessors understand engineering kit. For very high-value, in-demand machines (CNCs, multi-axis lathes), sale & leaseback often releases the most cash fast. For smaller or bespoke tools, hire purchase or secured loans may be more suitable.

Typical refinancing options for engineering machinery

Here are common refinancing routes and when each is usually best.

Sale & leaseback

You sell the machinery to a funder and lease it back under an agreed rental. You receive immediate cash while keeping use of the asset.

• Pros: Immediate large cash injection, minimal production disruption, can be efficient for tax/working capital.
• Cons: You no longer own the asset and will pay lease rentals; long-term cost may be higher than a secured loan.
• Best for: High-value, widely traded equipment (CNCs, presses, specialist production lines).

Asset refinance / secured business loan

Lenders provide a loan secured against the machinery (a fixed or floating charge). You keep ownership while borrowing against the asset’s value.

• Pros: Retain ownership and control; usually lower rates than unsecured borrowing.
• Cons: Lender may repossess on default; LTV (loan-to-value) limits apply.

Hire purchase & lease-purchase

Structured payment plan where ownership typically transfers after the final payment (hire purchase). Useful where you want predictable payments and eventual ownership.

Refinance via broker / invoice finance alternatives

Consider consolidating existing equipment finance, invoice finance to release cash tied up in invoices, or working capital facilities if asset-based routes are limited. Specialist brokers can access lenders who understand engineering equipment and market values.

Get Quote Now — free eligibility check and quick quotes from lenders and brokers who specialise in engineering equipment finance.

What lenders and brokers look for

Typical eligibility checks and factors that most lenders assess:

• Age, condition and maintenance history of the machinery — recent servicing and logs help.
• Equipment type and marketability — commodity machines fetch higher LTVs than bespoke kit.
• Professional valuation or broker valuation report (often required for high-value items).
• Company trading history, turnover and profitability (usually 12–24 months of accounts).
• Outstanding encumbrances — is there an existing charge on the asset?
• Director credit and guarantees (some lenders require director security on loans).
• Intended use of funds — working capital, contract fulfilment, debt consolidation.

Note: very old, highly customised or single-purpose machines with limited resale markets can be harder to refinance — a specialist valuer or lender may still help, but expect lower LTVs.

Costs, terms and how machinery is valued

Valuation methods

• Market resale value — what the machine would likely sell for second-hand.
• Depreciated value based on age, hours used and remaining economic life.
• Specialist valuations — recommended for equipment over ~£20k.

Typical LTVs and terms

• LTV often ranges from c.30% up to 70% depending on machine type and marketability.
• Terms commonly 1–7 years depending on asset life and lender.
• Interest rates vary by product, security and company credit — asset-secured finance tends to be cheaper than unsecured borrowing but check fees.

Typical fees to expect: arrangement fees, valuation fees, legal search fees, early repayment charges on existing finance if you refinance, and lease set-up costs. Always request a full schedule of costs when comparing offers.

Tax, accounting and practical implications

Key points to discuss with your accountant:

• Sale & leaseback: sale proceeds are cash inflow but change balance sheet treatment — you stop claiming capital allowances; lease rentals are usually deductible as expenses.
• Secured loans: ownership retained; you may continue to claim capital allowances on qualifying assets.
• VAT: depends on the transaction. VAT may apply to sale & leaseback or to lease rentals; special margin schemes can apply to second-hand equipment.
• Accounting: whether a lease is treated as an operating or finance lease can affect reported assets and liabilities—take professional advice.

We don’t provide tax or accounting advice — always consult your accountant before agreeing a deal.

Step-by-step: How to refinance your machinery (practical checklist)

Here’s a practical workflow to follow:

1. Inventory & condition report: list serial numbers, age, hours, photos, service records and warranties.
2. Gather company paperwork: last 12–24 months accounts, latest bank statements, business plan or contract invoices if funds support a contract.
3. Obtain a professional valuation for high-value kit (recommended for assets over ~£20k).
4. Decide what you need: determine the cash you want to release and the repayment profile you can manage.
5. Get multiple quotes: approach specialist lenders and brokers — use a matching service to save time.
6. Compare offers: check headline rate, fees, term, LTV, covenants, and repossession clauses.
7. Legal review: ask your solicitor/accountant to check agreements before signing.
8. Complete and monitor: once funds arrive, update asset registers and insurer details if required.

Document checklist to have ready

• Company registration and shareholder details
• Signed accounts (12–24 months)
• Bank statements
• Asset ownership documents and maintenance logs
• Proof of insurance
• Director ID and proof of address

Free Eligibility Check — Get Started (takes 2 minutes). Free & no obligation. Using our service won’t affect your credit score.

Pros & cons

How UK Business Loans helps

UK Business Loans connects engineering businesses with lenders and brokers who specialise in machinery and asset finance. We act as an introducer: tell us what you need and we match you to partners most likely to value your kit fairly and respond quickly. Our service is free and no obligation — complete a short, secure enquiry and we’ll organise quotes so you can compare options without searching dozens of providers.

Free Eligibility Check — Get Quote Now (secure, confidential, takes under 2 minutes).

Looking for more sector-specific information? See our engineering industry page on engineering business loans for additional resources and case studies.

Short anonymised case study

An East Midlands engineering SME converted three high-spec CNC machines into £120,000 of working capital using a sale & leaseback. The company kept production running, used the funds to fulfil a one-off contract and won a follow-on order. Lease payments were fixed, improving monthly cashflow predictability and supporting growth.

Frequently asked questions

Will refinancing affect my credit score?

Your initial enquiry through UK Business Loans does not affect your business credit file. Lenders or brokers we introduce may perform credit checks only if you choose to proceed with an application.

How long does the refinance process take?

Times vary: simple secured loans or hire purchase deals can complete in days; sale & leaseback and transactions needing valuations or solicitor work often take 1–4 weeks.

Can bespoke or very old machines be refinanced?

Possibly, but bespoke or very old kit is harder to value and may attract lower LTVs. Specialist valuers and niche lenders are usually required.

Will I lose my machinery if I refinance?

It depends: sale & leaseback transfers ownership to the funder (you retain use under lease). Secured loans keep ownership but carry repossession risk on default.

Is VAT payable on sale & leaseback?

VAT treatment differs by deal structure and whether margin schemes apply. Speak to your accountant — we can also connect you with advisers.

Do I have to buy the machinery back at the end of a lease?

That depends on the agreement. Hire purchase usually results in ownership after final payment; operating leases typically do not include purchase options.

Final CTA, compliance & disclaimer

Ready to free up cash without halting production? Start Your Free Eligibility Check — it’s quick, secure and no obligation. We will match you with lenders and brokers who understand engineering machinery and can provide tailored quotes.

Important: UK Business Loans is an introducer, not a lender, and does not provide regulated financial advice. Offers depend on lender criteria and status. Always obtain independent tax, accounting and legal advice before completing any finance agreement. Using our enquiry service does not affect your credit score; lenders may perform credit checks only if you proceed.

1. Will submitting an enquiry with UK Business Loans affect my credit score?
No — submitting a Free Eligibility Check with UK Business Loans is not a credit application and won’t affect your credit score, although individual lenders may carry out checks if you proceed to a formal application.

2. How long does machinery refinancing or an engineering business loan usually take?
Timelines vary — simple asset-secured loans or hire purchase deals can complete in days, while sale & leaseback transactions or deals requiring valuations and legal work typically take 1–4 weeks.

3. What refinancing options are available for engineering machinery?
Common routes include sale & leaseback, asset-secured refinancing (fixed or floating charge), hire purchase/lease-purchase and broker-led or alternative finance solutions such as invoice finance or consolidation.

4. How much can I borrow to refinance my machinery?
Typical finance starts from around £10,000 and can scale up to hundreds of thousands or millions depending on asset value, lender appetite and your company’s financial position.

5. Can bespoke or very old machines be refinanced?
Possibly — bespoke or older machines are harder to value and usually attract lower LTVs, but specialist valuers and niche lenders can often still provide finance.

6. Will I lose ownership of my machinery if I refinance?
It depends on the product — sale & leaseback transfers ownership to the funder while you lease the asset, whereas secured loans and hire purchase generally allow you to retain ownership (subject to lender security and covenants).

7. How are engineering machines valued and what loan-to-value (LTV) can I expect?
Valuations use market resale value, depreciation and specialist reports for high-value kit, with typical LTVs ranging from about 30% up to 70% depending on marketability and condition.

8. What documents do I need to apply for asset finance or machinery refinance?
Lenders commonly request company accounts (12–24 months), bank statements, asset inventory and photos, service/maintenance records, proof of ownership and director ID and address.

9. What fees and costs should I expect when refinancing equipment?
Expect arrangement and valuation fees, possible legal search and lease set-up fees, early repayment charges on existing finance and ongoing lease rentals or interest depending on the product.

10. How does UK Business Loans help me find the best engineering equipment finance?
UK Business Loans matches your enquiry to trusted, FCA-regulated brokers and lenders who specialise in engineering and asset finance, delivering free, no-obligation quotes so you can compare options quickly.