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Engineering and Manufacturing

PUBLISHED ON: 12/05/2023

Commercial finance for engineering and manufacturing businesses

Britain’s world-class engineering sector encompasses many disciplines and makes a significant contribution to economic prosperity in the UK. Along with our high-value manufacturing sector, their importance to the UK and the wider world cannot be underestimated.

Together, engineering and manufacturing drive innovation in this country and earn us a well-deserved reputation for quality and reliability. Success commonly hinges on access to the right type of funding, however, and trustworthy guidance on the best financial products.

UK Business Finance are commercial finance brokers with extensive experience in helping engineering and manufacturing businesses to obtain the funding they need. We offer our services free-of-charge to clients and search the whole of the market to find the best quotes.

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What challenges face the engineering and manufacturing sector?

Skills shortage
Skilled labour shortages in engineering and manufacturing compromise growth, so it is vital to make young people aware of the attractive prospects of working in these sectors. Funds are also needed to retrain or upskill the existing workforce. 

Lowering their carbon footprint, by limiting waste or using less power-hungry machinery, for example, has become a priority for engineering and manufacturing firms. This requires investment in new machinery or infrastructure.

Increased energy costs
As a high-use energy sector, manufacturing and engineering face considerable pressure on working capital following the steep rise in energy prices.

Supply chain disruption
Global supply problems following the pandemic and trading issues after Brexit have caused considerable disruption to engineering and manufacturing supply chains. Remodelling the supply chain and using technology to improve logistics and production may not be financially possible for some businesses.

Investment in AI
To keep up with rivals and compete in a digitally driven world manufacturing and engineering bosses need to invest in automation and robotics, but also in upskilling workers who may be displaced from their jobs as a result.

Recruitment and retention of staff
Following on from the skills gap issue, recruitment and retention of staff is a considerable cost. An ageing workforce and low numbers filling vacancies have led to incentivisation schemes to retain staff, including percentage pay increases and private health plans.

Commercial finance for engineering and manufacturing firms

Equipment/machinery finance and refinance
Equipment and machinery finance or refinance help businesses to invest in expensive hard assets by spreading the cost over several years of fixed-amount repayments. If the business wants to own the asset at the end of the term, a hire purchase agreement allows for this, otherwise a finance lease may be a better option. Businesses that already own expensive equipment and machinery can release the capital locked in their asset and rent it back from a financier.

Working capital finance
Working capital finance is designed to support cash flow during specific growth or innovation projects, helping to cover additional demands on cash such as wages or energy costs.

Supply chain finance
This type of finance enables larger businesses in a supply chain to retain working capital via extended payment deadlines negotiated with the lender. The financier pays the smaller supplier when their invoice is issued and approved by the client, offering significant benefits for cash flow.

Applying for engineering and manufacturing finance

The key to securing the best type of funding for your company is to obtain quotes from a range of lenders. This ensures that all requirements from the funding are met. UK Business Finance can carry out whole-of-market searches to find the best deals.

Our no-obligation services are free to clients. We are engineering and manufacturing finance experts and will write the applications to lenders on your behalf. We offer quotes for unsecured loans, secured loans, invoice finance, asset finance, vehicle finance, and commercial mortgages. Please get in touch to find out more.

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We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.