Finance Assets arranges hire purchase and leasing for UK engineering businesses buying new or used lathes, from manual centre lathes to CNC turning centres and sliding head machines.
Lathe finance spreads the cost of turning equipment over 2 to 7 years, so a subcontract machinist, toolroom or manufacturer can add capacity or move to CNC without a large cash outlay. We are a broker, not a lender, so we compare quotes from our lender panel rather than offering one bank’s product.
Written by Marcus Wright, founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed October 2026.
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The short version
- Lathe finance lets a business spread the cost of a lathe over 2 to 7 years.
- With hire purchase, the business owns the lathe after the final payment.
- Finance and operating leases keep upfront costs lower, but the lathe stays with the lender.
- CNC lathes from the major builders hold their value, so used machines are widely funded.
- Finance Assets arranges lathe finance for limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000.
| Item | Detail |
|---|---|
| Equipment covered | Manual centre lathes, CNC turning centres, mill-turn machines, sliding head lathes, vertical turning lathes, bar feeders and part loaders |
| Terms | Usually 2 to 5 years, and up to 7 years for new CNC machines |
| Paid upfront | Hire purchase: often a 10% deposit plus VAT. Leases: usually 1 to 3 rentals in advance |
| New or used | Both. Used CNC lathes from established builders are widely funded |
| Extra costs | Bar feeders, chip conveyors, tooling packages, CAM software, installation and training can often be included |
| Who we help | Limited companies and LLPs, plus sole traders and partnerships on business agreements over £25,000 |
Lathes we finance
Lenders will fund most turning equipment used in a business, as long as it comes from an identifiable supplier on a clear quote.
| Machine type | Examples |
|---|---|
| Manual lathes | Centre lathes, gap-bed lathes and toolroom lathes, often with digital readouts |
| CNC turning centres | Two-axis CNC lathes, turning centres with live tooling and Y-axis, and twin-spindle machines |
| Multi-tasking machines | Mill-turn centres that turn and mill a part complete in one set-up |
| Sliding head lathes | Swiss-type sliding head machines for small, complex turned parts from bar |
| Automatic lathes | Multi-spindle automatics, CNC multi-spindles and single-spindle cam automatics for high-volume turned parts from bar |
| Large and vertical lathes | Vertical turning lathes (VTLs), heavy-duty and long-bed lathes for large components |
| Ancillary equipment | Bar feeders, robot and gantry loaders, chip conveyors, mist extraction and tool presetters |
We regularly see machines from builders such as Mazak, DN Solutions (formerly Doosan), Haas, Okuma, Citizen, Star, Colchester and XYZ. For the other machine tools we fund, see manufacturing equipment finance.
Automatic lathes, including multi-spindle machines from makers such as Index, Tornos and Schütte and older cam automatics such as Wickmans, are still the workhorses of high-volume turned parts. Lenders fund used automatics where the machine has a known build year and service history, and they look closely at the long-running contracts the machine supports.
Sliding head lathes and bar work
Sliding head lathes produce small, precise parts in high volumes, often running unattended overnight. They are a common investment for subcontract turning firms serving medical, aerospace, automotive and electronics customers.
- The machine and bar feeder are usually funded together, as a sliding head lathe is rarely run without one.
- Resale value is strong for the major Japanese builders, which supports longer terms and makes operating leases possible.
- Tooling packages for a first job can often be included, usually up to a set share of the total.
- Your order book. Because these machines are bought for volume work, lenders may ask what jobs the machine will run and for which customers.
What lenders look at on lathe finance
- Brand and control. Lathes from established builders with mainstream CNC controls, such as Fanuc, Siemens or Mazatrol, have the widest resale market.
- Age and hours. On a used CNC lathe, lenders look at the year of manufacture and spindle hours. They cap the machine’s age at the end of the agreement, so an older machine may get a shorter term.
- Deal size. A small manual lathe can fall below a lender’s minimum deal size. Combining it with other equipment, or funding several machines together, usually gives better terms.
- Customer concentration. If one customer or sector accounts for most of your work, lenders may ask how secure that work is.
Hire purchase, finance lease and operating lease compared
Hire purchase suits a lathe you will keep for most of its working life. A lease suits you better if you want to spread the VAT or plan to upgrade. Our types of asset finance guide covers each option in more depth.
| Option | How it works | Best for |
|---|---|---|
| Hire purchase | You pay a deposit and fixed monthly payments, and own the lathe after the final payment and any option fee | Lathes you will run for many years |
| Finance lease | You rent the lathe for most of its working life. At the end you extend at a low rent, or sell it for the lender and keep most of the proceeds | Expensive CNC machines where spreading the VAT helps cash flow |
| Operating lease | You rent the lathe for part of its life, then hand it back or upgrade. Mostly available on new CNC machines from major builders | Production lathes you expect to replace as work changes |
Hire purchase for lathes
Hire purchase is the usual choice for lathes. You pay a deposit, usually 10% plus the VAT, then fixed monthly payments, and ownership passes to you after the final payment and a small option-to-purchase fee. As the owner for tax purposes, the business may be able to claim capital allowances on the lathe.
Finance lease for lathes
A finance lease keeps the upfront cost to a few rentals, and VAT is spread across the rentals rather than paid at the start. The lender owns the lathe throughout. At the end of the main term you can keep using it for a low secondary rent, or sell it on the lender’s behalf and receive most of the sale proceeds.
Operating lease for lathes
An operating lease sets the rentals against what the lathe is expected to be worth at the end of the term, so the lender carries the resale risk. It is most often available on new CNC lathes and sliding head machines from the major builders, which have an active second-hand market. At the end you hand the machine back, extend the lease or upgrade.
Lathe finance costs: a worked example
A £160,000 new sliding head lathe, with a bar feeder, chip conveyor and installation, costs about £2,989 a month on a 5-year hire purchase, or about £2,317 a month over 7 years.
| Item | 5 years | 7 years |
|---|---|---|
| Price (excl. VAT) | £160,000 | £160,000 |
| Deposit (10%) | £16,000 | £16,000 |
| VAT paid upfront | £32,000 | £32,000 |
| Monthly payment | £2,989.20 | £2,316.83 |
| Total interest | £35,352 | £50,613 |
The longer term lowers the monthly payment by about £672 but adds around £15,261 of interest. Many lenders will also defer the VAT for a few months.
Illustration calculated in October 2026, assuming an interest rate of 9% a year. It is not a quote. Your rate depends on your trading history, credit profile and the equipment.
VAT and tax on lathe finance
| Option | VAT | Usual tax treatment |
|---|---|---|
| Hire purchase | Paid on the full price at the start, reclaimable if you are VAT registered | You may be able to claim capital allowances, such as the Annual Investment Allowance, and the interest is deductible |
| Finance lease | Added to each rental | Rentals are usually deductible |
| Operating lease | Added to each rental | Rentals are usually deductible |
Tax depends on your circumstances, so check the treatment with your accountant.
What lenders ask for
Most lathe finance applications need the following.
- Your last 2 years of filed accounts, or management accounts and a forecast if you are newer
- Your last 3 to 6 months of business bank statements
- A quote from the supplier, showing the machine, its serial number and year if used, and any bar feeder, tooling and installation separately
- Photo ID and address history for each director
- Details of any existing finance agreements
Related guides
Who we can help
We arrange lathe finance for UK limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000 that are for business purposes. We are not authorised by the FCA, so we cannot arrange agreements of £25,000 or less for sole traders or partnerships of two or three partners, or finance for personal use.
Lathe finance FAQs
Can I finance a used CNC lathe?
Yes. Used CNC lathes from established builders are widely funded, especially through dealers who inspect and warranty them. Lenders cap the machine’s age at the end of the agreement, so an older lathe may get a shorter term. We can help limited companies and LLPs at most sizes, and sole traders and partnerships on agreements over £25,000.
How much does it cost to finance a CNC lathe?
It depends on the machine, the term and your business. As an illustration, a £160,000 sliding head lathe costs about £2,989 a month over 5 years on hire purchase at 9%, after a 10% deposit and the VAT paid upfront, or about £2,317 a month over 7 years.
Can I finance a manual lathe?
Yes, although a single manual lathe can fall below some lenders’ minimum deal size. It often works better to combine it with other workshop equipment, or to fund it alongside a CNC machine on one agreement.
Can a bar feeder and tooling be included?
Usually, yes. Most lenders will include bar feeders, loaders, chip conveyors, tooling packages, CAM software, installation and training alongside the lathe, usually up to a set share of the total.
Is it better to lease or buy a lathe?
Hire purchase usually works out better for a lathe you will keep for many years, because you own it at the end and may be able to claim capital allowances. A lease can suit a production machine you expect to replace, or a business that wants to spread the VAT. Finance Assets compares both for each deal.
Can a new machine shop get lathe finance?
Yes, although lenders look more closely at newer companies. They may ask for a larger deposit, a personal guarantee from the directors, or evidence of the work the machine will be used for. Directors with a machining background and existing customers both help.
Get a lathe finance quote
Tell us what you want to finance
Send us the machine, the price and a few details about your business. We will come back with the options that are realistic and what they are likely to cost.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd, which trades as Finance Assets. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders. Call 0161 546 9128.
Finance Assets is a trading name of Bolton Business Finance Ltd, an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. All lending is for business purposes only. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.