£420k CNC line refinanced to release growth capital

Briggate Precision had been quietly machining safety-critical components for the rail sector for over a decade. When a tier-1 aerospace prime put a tier-2 supply package out to tender, Briggate's technical track record and AS9100 accreditation put them on the shortlist — but the bid required evidence of £400k of working capital to cover the ramp-up phase.

The directors owned roughly £600k of CNC kit outright: two Mazak machining centres, a five-axis Hermle and a recently overhauled Studer grinder. The capacity was there. The cash wasn't.

The high-street bank offered to extend the overdraft — but only against a full debenture and personal guarantees from both directors. That was a non-starter; the family had spent twelve years building the business specifically to keep it off the personal balance sheet.

An invoice finance facility was floated, but Briggate's order book runs on six- to nine-month POs and a small number of large customers. Sub-optimal fit, expensive, and the concentration would have triggered debt-cap clauses.

We arranged for an asset-finance lender to value the four CNC machines and advance £420k as a lump sum, repayable over 60 months. Legally the assets transferred to the lender; commercially nothing changed — the kit stayed bolted to the factory floor and Briggate kept producing.

No debenture. No personal guarantee beyond standard director indemnities. No charge on the property. The only security is the machines themselves, which Briggate continues to use as if they still owned them outright.

The business considered the cash-flow and tax implications of the proposed agreement with its accountant. Tax and accounting treatment depend on the reporting framework, agreement, asset and the business’s circumstances.

The transaction record describes one completed customer situation. Timing, funding availability and future commercial outcomes vary and are not guaranteed for other businesses.