Can you finance a lathe?

Yes, lathes are financed as a standard asset purchase, usually on hire purchase or a lease, with the machine itself acting as the security. UK prices typically run £8,000 to £300,000, and most deals are written over 12–72 months with a deposit of around 10–20%. Decisions typically take 24–48 hours. Used machines are financeable too, usually with a shorter term.

Lathe Finance: Rates, Options & Eligibility

Q: Can I finance a used lathe?

Yes. Most lenders will finance a used lathe up to around 10 years old, and CNC turning centres tend to hold their value better over that period than manual lathes, which can make them easier to finance on comparable terms to new machines. For anything over about 5 years old, an independent valuation is usually required to confirm the machine's condition and current worth before the lender agrees terms. Buying through an established machine tool dealer with clear service history, spindle hours and any live tooling documented tends to make the application move faster, since a lathe with an unclear history is harder for a lender to value confidently.

Q: What deposit do I need for lathe finance?

For hire purchase, most lenders ask for a deposit of around 10 to 20% of the lathe's price, though this can sometimes be reduced for a well-established machine shop with a strong trading history. Finance lease and operating lease agreements often require no deposit, since the lender retains an interest in the machine throughout the term rather than needing cash up front. A larger deposit lowers your monthly payments and can help secure a better rate, but it's a choice rather than a requirement on most deals, so it usually comes down to whether you'd rather keep cash free for tooling and materials or reduce the ongoing cost of the finance.

Q: How quickly can I get lathe finance approved?

Most straightforward applications are approved within 24 to 48 hours, with same-day approval common for machines under £75,000 once bank statements, accounts and proof of ID are with the lender. Larger CNC turning centres, or applications involving multiple machines for a wider shop expansion, typically take longer, often 3 to 5 working days, while the lender reviews the fuller business case. Having a clear supplier quote, recent management accounts and details of the contract work the new lathe will support ready before you apply is the main thing that keeps the process moving quickly rather than stalling on paperwork requests partway through.

Q: Do I need to have been trading for a minimum period to get lathe finance?

Most mainstream lenders look for at least 2 years of trading history before offering standard rates and terms on lathe finance. This doesn't rule out a newer machine shop, but you may be asked for a personal guarantee from a director, a larger deposit, or a shorter term to offset the extra risk the lender is taking on. A start-up or recently formed subcontractor often does better going through a broker who can match the application to a lender comfortable with newer businesses, particularly if you can show a signed contract or firm order that the lathe is being bought to fulfil.

Q: Can installation and commissioning costs be included in lathe finance?

Yes. Most lenders will include rigging, installation, levelling and commissioning costs in the finance agreement alongside the lathe itself, provided they're itemised on the supplier's invoice. This matters because a CNC turning centre needs to be correctly levelled and commissioned to hold its rated tolerances, and rolling this into the same agreement as the machine is simpler than arranging separate funding for the installation work. It's worth asking your machine tool dealer for a single quote covering the lathe, delivery, rigging and commissioning before you apply, since lenders generally prefer to see the full cost of getting the machine running in one figure rather than piecing it together afterwards.

Q: What happens if I sell or part-exchange the lathe before the finance agreement ends?

Under a hire purchase agreement, the lender has a legal interest in the lathe until the final payment is made, so you'd need to settle the outstanding balance, often using proceeds from the sale, before the machine can be sold or part-exchanged free and clear. Many lenders will allow this and can calculate an early settlement figure on request. If you're planning to upgrade to a larger or more capable lathe, it's often possible to arrange a part-exchange directly with your dealer, who can work with the lender to settle the old agreement and roll any remaining balance into the new one, rather than you having to fund the shortfall separately.

Typical Cost

£8k – £300k

Approval Speed

24–48 hours

Same-day for < £75k

Rates From

4.6% APR

What would a lathe cost per month?

Lathe price (ex VAT) £55,000

Deposit 10%

Agreement term 60 months

Annual interest rate 9%

Balloon payment £0

Your estimate

Indicative only. Not a quote and not an offer of finance.

Pre-filled with a typical lathe price. Indicative only, not a quote.

Finance options

Hire Purchase (HP)

Rate: From 5.0% APR
Term: 12–72 months
Deposit: 10–20%
Ownership: Yours at the end
Best for: Machine shops wanting to own the lathe outright

Finance Lease

Rate: From 4.6% APR
Term: 12–72 months
Deposit: None required
Ownership: Return or buy (balloon payment)
Best for: Tax-efficient, claim 100% of payments against profit

Operating Lease

Rate: From 5.3% APR
Term: 24–60 months
Deposit: None required
Ownership: Return at end
Best for: Upgrade to latest turning technology. Off balance sheet.

Representative example

On a purchase price of £55,000: a 10% deposit of £5,500, then 48 monthly payments of £1,160 at 5.9% APR representative (fixed). Total amount payable £61,180, including the deposit. The rate you are offered depends on your business and the asset.

What buyers actually specify

Guide prices for sizing a finance agreement, not quotes. Manufacturers in this market mostly price on application, so where a current UK list price could not be confirmed the row describes a specification class rather than naming a model. Your supplier quote is what the agreement is written against.

Machine or specification	Guide price	Type
Mazak QT-250MSY	£65,000 – £100,000	CNC Turning Centre
DMG Mori NLX 2500	£80,000 – £140,000	CNC Lathe
Colchester Tornado A90	£35,000 – £55,000	CNC Lathe
Haas ST-20Y	£45,000 – £70,000	CNC Turning Centre

Tax benefits

Lathes qualify for Annual Investment Allowance (AIA), letting you deduct the full cost from taxable profits in year one, up to £1,000,000. HP agreements allow capital allowances. Lease payments are fully deductible.

Market context

Lathes are bought by subcontract machine shops, toolmakers and manufacturers, ranging from a manual lathe for a small general engineering business to a multi-axis CNC turning centre for a shop running high-volume contract work. Because a lathe can represent a large share of a small firm's capital, most buyers finance the purchase to keep working capital free for materials, tooling and wages between jobs. Replacement is generally driven by a customer requiring tighter tolerances or live tooling capability an older machine cannot deliver, rather than the lathe wearing out, since well-built lathes have a genuinely long working life. A strong, established used market supports refinancing an existing machine.

Bad credit?

Some specialist lenders consider businesses with imperfect credit histories. You may need a larger deposit or personal guarantee, but options may be available. Fundably may use a soft credit check for matching, which does not affect your credit score. A hard check may happen if you choose to proceed with a lender.

Frequently asked questions

Can I finance a used lathe?

Yes. Most lenders will finance a used lathe up to around 10 years old, and CNC turning centres tend to hold their value better over that period than manual lathes, which can make them easier to finance on comparable terms to new machines. For anything over about 5 years old, an independent valuation is usually required to confirm the machine's condition and current worth before the lender agrees terms. Buying through an established machine tool dealer with clear service history, spindle hours and any live tooling documented tends to make the application move faster, since a lathe with an unclear history is harder for a lender to value confidently.

What deposit do I need for lathe finance?

For hire purchase, most lenders ask for a deposit of around 10 to 20% of the lathe's price, though this can sometimes be reduced for a well-established machine shop with a strong trading history. Finance lease and operating lease agreements often require no deposit, since the lender retains an interest in the machine throughout the term rather than needing cash up front. A larger deposit lowers your monthly payments and can help secure a better rate, but it's a choice rather than a requirement on most deals, so it usually comes down to whether you'd rather keep cash free for tooling and materials or reduce the ongoing cost of the finance.

How quickly can I get lathe finance approved?

Most straightforward applications are approved within 24 to 48 hours, with same-day approval common for machines under £75,000 once bank statements, accounts and proof of ID are with the lender. Larger CNC turning centres, or applications involving multiple machines for a wider shop expansion, typically take longer, often 3 to 5 working days, while the lender reviews the fuller business case. Having a clear supplier quote, recent management accounts and details of the contract work the new lathe will support ready before you apply is the main thing that keeps the process moving quickly rather than stalling on paperwork requests partway through.

Do I need to have been trading for a minimum period to get lathe finance?

Most mainstream lenders look for at least 2 years of trading history before offering standard rates and terms on lathe finance. This doesn't rule out a newer machine shop, but you may be asked for a personal guarantee from a director, a larger deposit, or a shorter term to offset the extra risk the lender is taking on. A start-up or recently formed subcontractor often does better going through a broker who can match the application to a lender comfortable with newer businesses, particularly if you can show a signed contract or firm order that the lathe is being bought to fulfil.

Can installation and commissioning costs be included in lathe finance?

Yes. Most lenders will include rigging, installation, levelling and commissioning costs in the finance agreement alongside the lathe itself, provided they're itemised on the supplier's invoice. This matters because a CNC turning centre needs to be correctly levelled and commissioned to hold its rated tolerances, and rolling this into the same agreement as the machine is simpler than arranging separate funding for the installation work. It's worth asking your machine tool dealer for a single quote covering the lathe, delivery, rigging and commissioning before you apply, since lenders generally prefer to see the full cost of getting the machine running in one figure rather than piecing it together afterwards.

What happens if I sell or part-exchange the lathe before the finance agreement ends?

Under a hire purchase agreement, the lender has a legal interest in the lathe until the final payment is made, so you'd need to settle the outstanding balance, often using proceeds from the sale, before the machine can be sold or part-exchanged free and clear. Many lenders will allow this and can calculate an early settlement figure on request. If you're planning to upgrade to a larger or more capable lathe, it's often possible to arrange a part-exchange directly with your dealer, who can work with the lender to settle the old agreement and roll any remaining balance into the new one, rather than you having to fund the shortfall separately.

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Lathe Finance