Finance Options for Fibre Laser Cutting Machines
Hire Purchase (HP)
You pay a deposit then fixed monthly instalments. At the end of the term you own the machine outright. Capital allowances can be claimed on the full asset cost.
Finance Lease
The lender owns the asset; you pay monthly rentals. At the end of the term you can extend the lease or sell the asset on the lender's behalf. Rentals may be fully tax-deductible.
Operating Lease
Off-balance sheet rental with the lender taking residual value risk. Lower monthly cost but no ownership at the end. Suited to businesses that plan to upgrade technology regularly.
Sale & Leaseback
Sell a machine you already own to a lender and lease it back. Releases tied-up capital while retaining full use of the asset.
Worked Example: £220,000 Fibre Laser on 5-Year HP at 7.5%
| Parameter | Detail |
|---|---|
| Asset | New fibre laser cutting machine (e.g. Trumpf TruLaser 3030) |
| Total asset value | £220,000 |
| Deposit (10%) | £22,000 |
| Finance amount | £198,000 |
| Rate (illustrative) | 7.5% per annum |
| Term | 5 years (60 months) |
| Monthly payment | £3,968 |
| Total repayable | £238,051 |
| Total interest cost | £40,051 |
Illustrative only. Actual rate depends on business credit profile, deposit and lender. Full expensing may allow you to deduct the £220,000 asset cost in Year 1 - confirm with your accountant.
What Lenders Look for
- Trading history: 2+ years preferred; most high-street lenders want 3 years of filed accounts
- Turnover: Should broadly support the proposed monthly commitment (typically <20% of annual turnover)
- Asset details: Make, model, year, supplier and purchase price - new assets from authorised dealers attract the best terms
- Credit history: No County Court Judgements (CCJs) or insolvency in the last 3 years for mainstream lenders; specialist lenders are more flexible
- Deposit: 10% is standard; 0% available from specialist lenders for strong credits