Can I arrange finance for equipment that won’t be delivered for several months (forward funding)?

Short answer — direct and practical

Yes — you can arrange finance for equipment that will be delivered months later; this is commonly known as forward funding or pre-delivery finance.

Availability, structure and cost depend on the lender, the equipment type, the supplier agreement and your company’s credit profile.

Below we explain how forward funding works, what lenders expect, typical structures, risks and practical steps you should take next.

What is forward funding and how does it work?

Definition and common names

Forward funding (pre-delivery finance) is finance provided before or during the production period for equipment that will be delivered at a future date.

It is offered under a variety of labels such as equipment pre-delivery loans, advance payment finance, staged asset finance and manufacturer-backed funding.

Who offers forward funding?

Specialist asset finance lenders, some banks, and creditworthy brokers often arrange forward funding for established businesses.

These providers are comfortable funding long-lead assets like plant, bespoke machinery, specialist vehicles and renewable technology when backed by strong paperwork.

How funds are released

Funds are typically released in stages: initial deposit to the supplier, progress payments, and a final release on delivery or commissioning.

Some funders use escrow accounts, supplier guarantees or conditional drawdowns to protect both borrower and lender until the asset is delivered.

What lenders want to see (eligibility and documentation)

Key documents lenders typically require

Lenders usually ask for the supplier contract, a detailed purchase order or pro forma invoice and the expected delivery schedule.

They also request company accounts, management forecasts and evidence the equipment will be used for business purposes.

Asset and supplier factors

Lenders assess the type of equipment, residual value, manufacturer reputation and lead times before approving forward funding.

Bespoke or high-value items from reputable manufacturers are often easier to finance than unproven or single-use assets.

Credit profile and sector considerations

Your company’s trading history, credit score and sector matter because they affect perceived business continuity and collateral strength.

Some sectors such as construction, manufacturing, logistics and renewables commonly secure forward funding where equipment is asset-rich.

Related funding for green or energy projects

If you’re funding eco-equipment, consider lenders that offer sustainability-linked or specialist sustainability loans.

For more information about financing energy-efficient upgrades and eco assets, see our sustainability loans page: sustainability loans.

Typical financing structures and timelines

Common structures

Hire purchase, finance leases and conditional progress payment facilities are widely used for forward funding.

In hire purchase the borrower takes ownership once the final payment is made, while finance leases keep legal ownership with the funder but transfer use to the business.

Advance payments and staged drawdowns

Lenders can provide an initial deposit to the supplier and release further payments at agreed construction or delivery milestones.

Escrow arrangements and supplier certificates commonly trigger staged drawdowns to ensure money is used as intended.

Timelines and commitments

Typical lead times vary from a few weeks to many months for bespoke machinery and specialised plant, and lenders build these timelines into facility terms.

Commitment letters and Decisions in Principle (DIPs) let you reserve funding conditional on final documentation and delivery confirmation.

How Best Business Loans helps with timing

We can help you identify lenders that accept long lead times and broker routes that secure conditional offers before capital is committed.

Submitting a Quick Quote gives you an early sense of likely terms and whether a full application is worth pursuing.

Costs, risks and how to mitigate them

Typical costs to expect

Forward funding often carries arrangement fees, interest on drawn sums, and sometimes fees for staged drawdowns or escrow administration.

Rates will depend on your credit strength, asset type and whether the lender takes additional security.

Key risks and controls

Major risks include supplier insolvency, delivery delays, specification changes and currency fluctuations on imported equipment.

Mitigations include supplier warranties, retention in contracts, performance bonds, insurance and staged payments tied to verified milestones.

VAT, capital allowances and tax considerations

Some funders will finance VAT as part of the facility and others expect VAT to be paid upfront or reclaimed separately by the borrower.

Claiming capital allowances or writing down allowances depends on how the asset is financed, so always check tax treatment with your accountant.

Practical steps to reduce cost and risk

Obtain a clear supplier contract with delivery milestones, insist on manufacturer guarantees and arrange suitable insurance for goods in transit.

Prepare up-to-date management accounts and cashflow forecasts to help lenders process your application faster and more favourably.

Practical next steps, checklist and how we can connect you

Checklist before you apply

Gather the supplier contract, purchase order or pro forma invoice, equipment specifications and a confirmed delivery schedule.

Prepare management accounts for the last two years, a recent bank statement, and a brief statement of how the equipment will support trading.

How to approach lenders and brokers

Start with a Decision in Principle or Quick Quote to test likely approval and pricing before committing to supplier deposits.

Use brokers or platforms that specialise in asset finance and forward funding to avoid mis-matches and wasted negotiating time.

How Best Business Loans supports forward funding enquiries

We do not supply loans directly; we use AI-driven matching and an established network of lenders and brokers to connect you with providers who understand forward funding.

Submit a Quick Quote to get an eligibility check and a Decision in Principle that you can take to suppliers and manufacturers.

Key takeaways

Forward funding is available for equipment with long lead times when supported by supplier agreements, suitable credit and clear security arrangements.

Costs and structure vary; common options include staged drawdowns, hire purchase and finance leases, often with escrow or supplier guarantees.

Prepare documentation, manage delivery and insolvency risks and use specialist brokers or platforms to improve chances of approval.

Ready to check eligibility?

If you want a fast, no-obligation Decision in Principle, complete our Quick Quote form and we’ll match your enquiry to lenders or brokers who can support forward funding.

We act as an independent introducer and do not provide credit ourselves; your details remain secure and confidential at all times.

Need help preparing paperwork or want to talk through options before you apply? Email our UK support team at hello@bestbusinessloans.ai for guidance.