Manufacturing Finance
Raw materials, production wages and energy costs arise before finished goods become cash. Review the pre-production requirement, completed B2B invoices and machinery investment separately, then test whether the combined repayments fit your production cycle.
Tell us the amount, purpose and timing. NBS reviews a suitable starting route and clarifies what information is needed next. Best estimates are fine.
NBS Finance is a commercial finance broker and introducer, not a lender, and primarily supports UK limited companies. Funding is subject to provider assessment and terms. An enquiry does not guarantee an offer.
Follow the order from materials to customer receipt
A purchase order can be commercially valuable without being a fundable receivable. Map deposits, raw materials, production, quality approval, delivery, customer acceptance, invoicing and cash collection. State whether you manufacture to stock, to order or in stages, because the earliest funding gap differs.
| Stage | Possible route | Evidence and limits |
|---|---|---|
| Materials and production before delivery | Working-capital or supplier-stage review | Costed orders, supplier terms, contribution, margins and repayment; standard invoice finance does not automatically fund WIP. |
| Delivered and accepted goods | Invoice finance | Eligible B2B invoices, delivery/acceptance evidence, customer terms and deductions. |
| CNC machine or production line | Asset finance | Quotation, installation, useful life, utilisation and affordable repayments. |
| Established assets and sizeable debtor book | Coordinated refinance or ABL review | Ownership, valuations, existing security and reporting controls; avoid double counting. |
For a purchase-led requirement read trade finance; for multiple asset pools read asset-based lending. Not every manufacturer needs a complex combined facility.
Work in progress is not the same as a completed sale
Material bought, time booked and partly finished goods can sit on the balance sheet before the customer owes an unconditional invoice. Quality approval, testing, delivery, installation, warranty claims, return rights and set-off may change the provider’s assessment. Explain those triggers and retain the supporting documents.
Invoice funding can release cash from eligible completed sales to support the continuing cycle. It cannot simply turn the value of every uncompleted order into cash. A large customer does not remove acceptance risk or debtor concentration limits. Overseas sales also need country, currency and contractual checks.
Illustration: find the unfunded phase
Hypothetical production cycle: materials of £40,000 and conversion costs of £20,000 are paid before delivery. The customer is then invoiced £80,000 on assumed 45-day terms. The £20,000 difference is before overheads, finance charges, rejects and tax. Even if that invoice later qualifies for funding, the earlier £60,000 production outlay still needs a plan.
Test a two-week delay in approval or a rejected batch. Forecast inventory, debtor collections and supplier payments by date rather than applying a headline advance percentage to all orders. A growing order book can increase the funding need before it increases receipts.
Buy capacity that can earn through the repayment term
For machinery finance, distinguish the machine price from tooling, delivery, installation, commissioning, training and downtime. Ask which items a provider will include and which need a separate contribution. Compare hire purchase and leasing by ownership, total payments and end obligations, with tax advice where appropriate.
Show the additional productive capacity, labour and power costs, customer demand and downside utilisation. A new line does not automatically achieve full output immediately. Refinance of owned machinery depends on saleable value, settlements, condition and security, not historic purchase price.
Compare funding/service charges, valuations, audits, guarantees, minimum fees and exit provisions. Debt service must fit weaker production months as well as the forecast peak. Invoice finance also requires ongoing ledger reporting and can leave you responsible if the customer fails to pay.
Prepare a useful funding review
- Order book with production, acceptance, invoicing and receipt dates
- Materials/WIP/finished-stock ageing, costings and customer return or quality terms
- Aged debtor ledger, concentration, disputes and existing facilities
- Machine quote and installation budget, asset ownership/settlements, accounts and production cash forecast
For the first enquiry, give your company, trading history, approximate turnover, amount, purpose, timing and current facilities. Best estimates are fine; say “Not sure” where needed. You do not need every document to begin. Use business-level totals and agree a secure process before sending detailed confidential records.
NBS reviews the requirement and clarifies gaps before assessing possible routes through lenders and specialist partners. The provider decides eligibility and any offer. Read the existing enquiry’s privacy notice and sharing authorisation before submission.
Manufacturing Finance: practical questions
Can work in progress be funded as an invoice?
Not automatically. Identify the contractual stage and actual debt. A specialist structure may require a separate assessment; an internal WIP value is not enough.
Can second-hand CNC machinery be financed?
It can be reviewed where the asset, seller, age, condition, useful life and affordability fit a provider’s criteria. No approval is implied.
Does a large customer make the ledger eligible?
Customer quality helps assessment but does not resolve acceptance conditions, disputes, returns, concentration limits or existing security.
Relevant guidance and sources
Sources and scope
- Close Brothers: manufacturing invoice finance
- Close Brothers Asset Finance: finance products
- British Business Bank: invoice finance
Provider and competitor pages describe their own services, not an NBS lender relationship or offer. Eligibility, access, charges, security and appetite must be checked for your case. Illustrations on this page are hypothetical. This is general business-finance information, not legal, tax or accounting advice.
Review My Manufacturing Funding
Explain the business requirement, approximate amount and when the cash or asset is needed. An enquiry does not commit you to accepting finance. Ask for the complete costs, terms and responsibilities before deciding to proceed.
Funding production growth with a business loan
For an established manufacturer, a term-loan request should show the cost of additional capacity, raw materials and operating cash before new sales are collected. Separate work in progress from completed eligible invoices, and include existing machine-finance payments in the repayment case.
If the requirement is £250,000 or more, review large business loans for expansion and working capital. Requests into the millions can be considered individually through funding partners, subject to underwriting, affordability, security, lender appetite and structure. A loan is not a substitute for checking order margins and production delivery risk.