Asset based lending for engineering firms

• Cash flow challenge: Waiting months for customer payments while covering wages, materials, and equipment maintenance.

• Perfect for: Accountants, finance directors, and business advisers supporting UK SMEs that need faster access to working capital without increasing debt..

Novuna helps engineering firms unlock cash from their existing assets through tailored asset-based lending facilities, either through our award-winning in-house service or by comparing providers and making sure you have a great deal for your situation.

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What is asset based lending?

Asset based lending (ABL) is a flexible form of finance that allows businesses to borrow against the value of their tangible and intangible assets. For engineering firms, this means using plant, machinery, stock, or outstanding invoices as security to release funds tied up in the business.

Unlike a traditional loan, your borrowing capacity grows as your assets increase giving you access to scalable, predictable funding that moves with your operations. ABL can be used alongside other solutions such as invoice finance, equipment finance, or working capital loans to build a complete funding strategy.

Key benefits for asset based lending for engineering firms

• Unlock hidden value: Use plant, machinery, and receivables to raise immediate cash.

• Support growth: Fund new contracts, R&D, or capital expenditure without taking on equity partners.

• Smooth cash flow: Manage long project lead times or late-paying clients with confidence.

• Flexible structure: Borrowing limits adapt as asset values change or your business grows.

• Preserve control: Maintain full ownership while improving liquidity.

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How asset based lending works

1. A lender assesses the value of your eligible assets such as machinery, equipment, inventory, or receivables.
2. You agree a borrowing base that determines how much you can draw against those assets.
3. Use your available facility as and when you need it, with funds released quickly into your business account.
4. As your asset base changes, so does your borrowing potential ensuring your facility grows with your business.

Many engineering firms use ABL to refinance existing debt, fund acquisitions, or bridge contract payment cycles.

Types of assets you can secure against

• Machinery and plant: CNC machines, fabrication tools, and heavy equipment.

• Property and vehicles: Industrial units or fleet vehicles.

• Inventory: Raw materials or finished components ready for delivery.

• Receivables: Unpaid invoices from customers or contractors.

Combining these assets within one facility maximises available funding and reduces reliance on multiple loans or overdrafts.

When to use asset based lending for your firm

• Winning a new contract that requires upfront investment.

• Expanding production capacity or upgrading machinery.

• Managing cash flow during seasonal or cyclical demand.

• Financing acquisitions or restructuring existing debt.

How Novuna Business Cash Flow can help

We’ve helped engineering firms across the UK unlock the value tied up in their machinery, equipment, and outstanding invoices to keep projects moving and operations running smoothly. 

Speak to our experts today and we will help you find a great fit for your situation.