Equipment Financing for Manufacturing: CNC, Injection Molding and Production Lines
How manufacturing businesses can finance CNC machinery, fabrication equipment, production lines, and other capital equipment.
The Capital Equipment Challenge
Manufacturing runs on capital equipment—CNC machines, fabrication equipment, production lines, quality systems. A single piece of equipment can cost $100,000 to $1,000,000 or more. Financing makes these investments possible without depleting all working capital.
Equipment financing is often the most accessible financing available to manufacturers because the equipment itself provides collateral.
Common Manufacturing Equipment
| Equipment | Typical Cost | Lifespan | Financing Notes |
|---|---|---|---|
| CNC machining center | $100K-$500K+ | 15-20 years | Excellent financing candidate |
| CNC lathe | $50K-$300K | 15-20 years | Strong residual value |
| Injection molding | $50K-$500K+ | 15-25 years | Specialized lenders available |
| Press brake | $50K-$300K | 20+ years | Long-lasting, finances well |
| Laser cutter | $100K-$500K+ | 10-15 years | Technology considerations |
| Packaging line | $100K-$1M+ | 15-20 years | Often bundled financing |
| Quality equipment | $25K-$200K | 10-15 years | CMMs, testing equipment |
Equipment Loans vs. Leases
Manufacturers can either finance equipment purchases (loans) or lease equipment:
- Equipment loans: You own immediately, build equity, claim depreciation
- Capital lease ($1 buyout): Lower payments, own at end
- Operating lease: Lowest payments, return at end or purchase
- Sale-leaseback: Convert owned equipment to cash
Manufacturing equipment with 15-20 year lifespans typically favors purchasing. You'll use the equipment long past when financing is paid off, building significant equity.
New vs. Used Equipment
Quality used manufacturing equipment can provide excellent value. A 5-year-old CNC machine might cost 40-50% of new price with 75% of its useful life remaining.
Factors to consider: technology advancement (does newer equipment offer significant advantages?), maintenance history and condition, financing availability (used terms may be shorter), and retrofit and update costs.
Section 179 and Bonus Depreciation
Manufacturing equipment purchases may qualify for significant tax benefits. Section 179 allows immediate deduction of equipment purchases up to $1,160,000 (2024 limit). Bonus depreciation provides additional first-year deductions.
A $400,000 CNC machine might reduce your tax bill by $100,000 or more in the purchase year, significantly reducing the effective cost.
Time major equipment purchases strategically. Year-end purchases still qualify for full-year tax benefits. Work with your accountant to maximize deduction timing.
Financing Sources
- Equipment manufacturers: Mazak, Haas, DMG MORI, etc. offer financing
- Banks: Best rates for established manufacturers
- Equipment finance companies: Specialize in manufacturing equipment
- SBA 504: Ideal for equipment over $150K
- Asset-based lenders: Leverage existing equipment as collateral
Qualification Requirements
Equipment financing requirements vary but typically include 1-2 years in business (some lenders accept less), personal credit of 600+ (higher for best rates), down payment of 0-20%, and demonstrated ability to service the debt.
Strong equipment value as collateral often enables approval when other financing might not be available.
Building Equipment Strategy
Approach equipment acquisition strategically: prioritize equipment that eliminates bottlenecks or enables new capabilities, calculate ROI before financing (what revenue will this equipment generate?), consider total cost of ownership (installation, training, maintenance), and time purchases to maximize tax benefits.
Every equipment decision should tie to specific business outcomes.
Ready to explore your options?
See what financing you qualify for in minutes — no impact to your credit score.
Related Articles
Business Loans for Manufacturing: Equipment, Working Capital, and Growth
Manufacturing financing options including equipment loans, working capital for production cycles, and expansion funding. Navigate capital-intensive operations.
Read more →Equipment Financing: How to Get the Machinery, Vehicles, and Tech Your Business Needs
Learn how equipment financing works, what qualifies as equipment, typical loan terms and rates, and how self-collateralization makes approval easier for businesses of all sizes.
Read more →Equipment Loan vs. Equipment Lease: Which Is Right for Your Business?
A comprehensive comparison of equipment loans and leases, covering ownership, costs, tax implications, and which option fits different business needs.
Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
No Guarantee of Financing: Liminal Lending Co. is a business loan marketplace that connects borrowers with third-party lenders. We are not a lender and do not make credit decisions. Submitting an application does not guarantee approval or funding. Loan terms, rates, and availability vary by lender and are subject to borrower qualifications and lender criteria.
Third-Party Lenders: All loan products are offered by independent third-party lenders. Liminal Lending Co. is an Independent Sales Organization (ISO) and receives compensation from lenders for successful referrals. Terms and conditions of any loan are between you and the lender.
Rate Information: Rates, terms, and fees mentioned in this article are estimates based on publicly available information and may not reflect current market conditions or specific lender offers. Actual rates depend on creditworthiness, business financials, and lender policies.
Information May Change: Financial markets, lending regulations, and economic conditions are subject to rapid change. While we strive to keep our content accurate and up-to-date, information in this article may become outdated. Always verify current rates, terms, program availability, and regulatory requirements with lenders and official sources before making financial decisions.