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Whether you’re replacing worn-out machinery or getting ready for an increase in your plant’s production, buying new equipment is an important event for your business. That’s why you need the right financing behind you to ensure you get the machinery to increase your production and keep your manufacturing supply lines rolling out.
LoanTube works with our UK lenders to give you the affordable finance you need to get the equipment your business needs.
If you have a manufacturing business, buying plant equipment outright can cost a lot. Even if your business works in services rather than manufacturing, you’ll still need to buy and replace pricey equipment. That’s where machinery finance helps you cover the costs.
Equipment finance allows you to buy or lease equipment and machinery and spread the cost over a fixed term. This makes the repayments more affordable for you. What’s more, the lender usually uses the machinery you buy as security, which means it takes on less risk of default and gives you lower interest rates.
If you eventually want to own your new machinery outright, you can use machinery finance to buy it with a hire purchase agreement (HP). This means you buy your machine with a loan which is secured against the machine. You then pay the loan and interest back to your lender in monthly installments at fixed intervals. When you repay the loan in full, the lender removes it’s charge from the machine. You can then keep the equipment, sell it or otherwise do with as you like. With HP, you’re responsible for all the insurance and maintenance of the machinery while you’re making the repayments. You can’t sell the machine unless the lender’s charge is removed from it.
If you’d prefer to lease your machinery rather than buy it outright, you can use machinery finance to fund a lease agreement. If you do this, the lender buys the machinery for you and you lease it back from them. Usually, this gives you cheaper monthly repayments as you are only paying off the depreciation and interest, and you won’t own the assets at the end.
When you take out a finance lease, it’s usually up to you to keep your machinery in good condition during the lease. You can return it at the end of the lease and upgrade, but it should be in great condition or you may face penalties. You also have the option to buy it from the lender by paying a single balloon payment which is agreed in advance. Machinery Finance Leasing is more like renting with a buy option, where the Lender remains the owner of the machine, unless you exercise your buy option and pay the pre-agreed balloon payment.
Often used for heavy plant machinery, an operating lease (or contract hire) is more like pure renting with no buy option. With operating leases, you make fixed monthly payments and then return the machines to the lender with a final payment based on their value. Usually, the lender will maintain the machines themselves, it’s the lender who remains the owner of the machine always.
Our UK lenders offer machinery financing options for every stage of your business’s growth. Whether your business offers consultancy, and you need new computers, or you’re in manufacturing and production, and you require an entirely new plant, you could finance it with a machinery finance loan.
Usually, you can finance any of the equipment your business needs to run with machinery finance. Depending on what your business does and the kind of things you need, you might borrow to fund the purchase of:
Machinery finance is open to any kind of business that needs machinery and equipment for growth. These are some of the types of businesses and how they use their finance:
Catering : If you have a fast-moving catering business and need to grow, you can borrow to get the equipment and machines you need. Whether you need vehicles to transport you and your staff to the next event, or gleaming kitchen equipment to turn out orders, you can fund it through machinery finance.
Construction and manufacturing : When your construction company is ready to increase supply, machinery finance gives you access to the plant and the heavy machinery you need. You can fund new loaders, lorries or even an entire high-tech production line for your plant.
Services : While you may not need heavy machines, if you’re based in services or professional services, you can still use machinery finance to get the computer, office and other equipment you require.
Leisure and gyms : Give your customers the latest sporting equipment without paying high, upfront purchase costs. Funding gym and leisure equipment through machinery finance can make sense for many gym owners and leisure providers.
Whether you are buying on Hire Purchase, leasing or funding your purchase through a secured loan, machinery finance usually offers lower rates than an unsecured loan. As the machinery you buy is put up as security, there is less risk to the lender and the repayment interest is usually lower. Furthermore, you can use machinery finance to fund equipment purchases for several years, meaning you can spread out the cost and manage your monthly budget.
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Check your affordibility with our Business Loan calculator and make an informed financial decision.
With machinery finance, the lender arranges your loan so that you can get your new equipment through:
You then pay a fixed repayment to the lender in regular instalments. Depending on the type of finance agreement you take out, you either own the machinery outright at the end, return it, or buy it with a balloon payment.
Pros
Cons
There are so many types of machinery finance and loan options in the United Kingdom, it’s hard to know where to begin. That’s where our team of experts have your back on every step of your business’s journey. We’re committed to working with businesses and lenders to give you the right kind of machinery finance for your needs. Whether you’re a caterer who needs to Hire Purchase a new kitchen, or a plant owner looking for an operating lease for a new fleet of cranes, we’ll find the best lenders for you. What’s more, we’ll explain your options and make sure you’re happy with your loan and the repayments.
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Because lenders use the machinery you buy as security, many will only allow you to buy new assets with your finance. But there’s still a lot of good-quality, second-hand equipment your business might want to buy. Fortunately, some lenders make extra checks on used equipment and then allow second-hand purchases. Contact our credit broker experts for a personal overview of loans open to you and your business.
Many businesses use machinery finance because it gives them an affordable, low-cost loan to purchase equipment. Rather than sink all your cash reserves into buying manufacturing equipment, you can keep assets for later growth and offset the cost over the years. That leaves you with money to expand and make your business grow, rather than investing it all in machinery early on.
The length of time you can extend your borrowing varies, depending on your lender and the value of the equipment and machinery you want to buy. Most lenders will give you a loan for up to 7 years. This may be less if the machinery you buy loses its value fast or is likely to become worn out quickly.
Software finance is growing in popularity though not all lenders offer this. If you need a new software package to handle orders or manage your digital business, then contact LoanTube and let our friendly loan brokers take you through your options.
LoanTube helps UK firms access business finance through multiple direct lenders. We are an introducer and do not provide loans ourselves.
Think carefully before securing debts against your home or your assets. Your home and assets may be repossessed if you fail to keep up with repayments on debts secured against it.
All loan approvals & quotes are subject to credit checks and affordability requirements by lenders. If your business meet the lender’s criterion, you can borrow the money. We as a broker make an attempt to process your application with the most suitable lenders in our panel.
LoanTube is a credit broker and not a lender.
Warning: Late repayment can cause you serious money problems. For more information, go to MONEYADVICESERVICE.ORG.UK
The rate you are offered will depend on your individual circumstances.
Representative APR Example: Amount of credit: £50,000 for 24 months at £2,339.38 per month. Total amount repayable of £57,348.69 Interest: £7,348.69 Interest rate: 14.4% pa (fixed).
14.4% APR Representative. Loan term lengths between 3 and 60 months.
