Manufacturing equipment finance can fund eligible production assets, but a factory project often needs cash before the machine is installed and earning revenue. Match supplier payment milestones, lender funding conditions, installation costs and the production ramp-up before committing to a deposit or relying on a delivery date.
Map the project from order to customer payment
A standard equipment purchase and a commissioned production line can have very different timelines. The supplier may request a deposit, a payment before shipment and a balance before installation. Your first customer receipt may arrive much later, after testing, production, delivery and the customer's payment period.
Write each event on one timeline with its amount, responsible party and evidence needed. Include site preparation and the overlap between existing production costs and the new equipment. Ask what happens if one milestone moves while the others remain payable.
Our machinery finance guide explains the general lending structures. For manufacturing, the priority is to make the funding arrangement work through the whole project, not just the day a supplier issues its final invoice.
Confirm what the lender can fund before paying a deposit
Provide the complete supply contract and payment schedule early. Ask whether the proposed lender pays only when the asset is delivered, can consider staged funding, or requires a separate arrangement before final settlement. Obtain a written answer for the actual proposal.
Confirm the treatment of any deposit already paid. Reimbursement is not automatic. Ask which entity must appear on invoices, how supplier payments are made and what evidence is required before a drawdown. Do not describe a general loan limit as cash available for every supplier milestone.
For illustration, a machine order might require a deposit, a pre-shipment payment and an installation balance. If finance only becomes available after arrival, the earlier payments need a verified funding source. Identifying that gap before signing can change the supplier negotiation or the project timetable.
Separate the machine from the costs around it
Obtain an itemised budget rather than a single equipment total. List tooling, freight, cranage, electrical work, foundations, extraction, guarding, networking, operator training and commissioning where relevant. Have qualified suppliers confirm the requirements for the actual site and machine.
Next to each cost, record whether the lender has agreed to fund it. Building work and recurring software charges may be treated differently from identifiable equipment. Budget for taxes and import charges with the appropriate advisers; do not assume a later tax adjustment will arrive in time to pay a supplier.
Allow for raw materials, trial runs, scrap, extra labour and slower output while the process is established. These are operational assumptions to test, not promised costs or productivity gains. Compare the new line's output with actual orders and staffing capacity before estimating cash available for repayments.
Manage imported machinery as a separate risk
An overseas purchase adds questions about currency, shipping terms, insurance, customs clearance and local support. Confirm who carries the risk during transit, which party imports the machine and how an exchange-rate change affects the remaining invoice. Ask whether the lender accepts the supplier and payment arrangements.
The Department of Agriculture's machinery import guidance says imported machinery must be free of contamination such as soil and plant material. Check the current conditions for the equipment before shipment and budget for the consequences of delay. Do not assume industrial use removes biosecurity requirements.
Have relevant specialists verify Australian installation and operating requirements. An overseas specification or supplier warranty does not answer every local question. Identify who can service the machine, obtain parts and resolve software problems once it is in your factory.
Agree on acceptance and responsibility for defects
Define what the supplier must demonstrate before you accept the equipment. That may involve agreed specifications, installation completion, testing, training and handover records. Separate a delivery receipt from a confirmation that commissioning has been completed satisfactorily.
For example, clause 10.5 of ANZ's asset finance terms says payment obligations continue where ANZ has paid for the goods but they have not arrived, subject to the contract's exceptions and applicable statutory protections. The finance agreement is not a substitute for supplier protections.
Ask your advisers how to handle defects, delays and disputed acceptance before instructing a payment. Keep written records of changes to the specification. A larger machine or revised installation scope can change both the budget and the asset the lender agreed to finance.
Build a downtime and delayed-start forecast
Prepare a forecast with the intended start date and another with a meaningful delay. Keep existing loan payments, rent, wages and supplier commitments in both. Add temporary outsourcing or continued use of the old equipment if those are realistic options, supported by current quotes.
Use a hypothetical factory replacing a packaging line as the test. Installation takes longer, the old line must keep running and customer receipts from the replacement arrive a month later. Identify which payments still fall due and the reserve needed to meet them. A project can be profitable over its life and still run out of cash during this overlap.
For a second-hand machine, add inspection and refurbishment costs using the used equipment finance checklist. If the uncovered costs are mainly working capital, our asset finance versus business loan guide explains the distinction.
Compare relevant commercial lenders
The NAB lender profile is a starting point for understanding the provider. NAB's separate business equipment loan page includes manufacturing equipment. Its published settlement process describes payment to the supplier when documentation and collection conditions are met; clarify how a staged project would be handled.
Our Commonwealth Bank profile provides broader lender context. CommBank's official car and equipment finance page describes tailored structures and supplier payment. Ask specifically about the machinery, imported supply chain and pre-delivery costs, rather than inferring staged funding from those general features.
The profiles may discuss consumer products; commercial machinery terms are separate. Neither example establishes approval or a progress-payment facility. Compare the actual proposal using the commercial asset finance lenders guide.
Bring a project pack to the finance discussion
A useful submission includes:
- The borrowing entity, business financial evidence and existing debt schedule.
- Equipment specifications, supplier identity and the signed or proposed supply terms.
- Every deposit, shipment, delivery and commissioning milestone.
- A full project budget separating agreed finance from unfunded costs.
- Base and delayed-start cash-flow forecasts, with assumptions identified.
- Inspection, insurance, support and acceptance arrangements.
Use the commercial application documents guide for the financial pack, then bring the project timeline to Loanseekers machinery finance. The aim is to resolve the funding gap before the factory commits to dates and payments it cannot comfortably carry.
