A growing order book is a good problem to have, but it can quickly become a constraint if your manufacturing capacity cannot keep pace. Turning down contracts or extending lead times are both costly outcomes. Business finance — whether a term loan or an asset finance arrangement — lets you invest in production capacity ahead of demand, confident that the order pipeline will service the debt.
Financing machinery and equipment
For capital equipment with a clear asset value — CNC machines, injection moulding equipment, industrial ovens, printing presses, or packaging lines — asset finance is often the most efficient structure. The equipment itself provides security for the lender, which can make terms more competitive than an unsecured business loan. Term loans are more appropriate for investments that do not produce a single identifiable asset: factory fit-out, electrical or ventilation infrastructure, or a composite of smaller equipment purchases.
Matching finance to production ramp-up
New manufacturing equipment rarely generates revenue from day one: there is typically a commissioning period, staff training, and a ramp-up phase before the line runs at full capacity. When forecasting repayments, build in a realistic timeline from installation to full production — if a new line takes three months to commission, your cash flow projections should reflect that. Illustrative figures only, not a quote. Some lenders offer a capital repayment holiday during the installation and ramp-up period, which is worth requesting explicitly.
What lenders want to see from manufacturers
Beyond standard company accounts, manufacturers can strengthen a finance application by including: a confirmed order book or framework agreement that demonstrates demand, utilisation data for existing equipment (showing existing lines are at or near capacity), and supplier quotes for the new equipment. An independent machinery valuation, where relevant, gives the lender a cleaner view of asset security.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Launching a new product line with business finance, Expanding into a new region with business finance.