CNC Machine Leasing: Private Lender Guide

A new CNC—router, mill, lathe, Swiss, laser, waterjet, press brake with CNC backgauge—can add capacity overnight, win higher-margin work, and cut rework. Banks, however, often hesitate on used machines, private sales, or growth-stage financials. That’s where private (B/C/D) lenders fit: they underwrite the asset + cash flow and move quickly.

Mehmi Financial Group is unusual: we sell commercial assets and finance them—daily—across 30+ Canadian lenders. From this dual vantage point, here’s exactly how CNC files get approved with private lenders in 2025: the structures that work, the documents that de-risk, and the practical steps that compress time-to-funding. If you’d like a quick read on your file, feel free to contact our credit analysts.

What private lenders care about on a CNC (and why)

Asset signals (prove it’s productive, liquid, and supportable)

• Make/model/year & controller (Fanuc, Siemens, Mazatrol, Heidenhain, Fagor; for routers: OSAI/B&R, etc.).
• Hours/condition: power-on, cycle, spindle hours; backlash, ball-screw condition, ways/guides (box vs linear), alignment reports.
• Specification fit: travels, spindle HP/RPM, tool changer, ATC capacity, live tooling/C-axis (lathes), 4th/5th axis, table size, chuck size, bar capacity, turret type.
• Accuracy & maintenance: recent laser calibration or ballbar test, preventive maintenance logs, coolant/chiller, lubrication.
• Peripherals: chip conveyor, mist/dust collection, hydraulic/pneumatic packages, probing, tool presetter.
• Software & options: licenses, post processors, probing macros, networking (DNC).
• Power & install: 208/575V, 3-phase, breaker size, air requirements; rigging notes.

Marketability

• Mainstream brands, current controllers, and in-demand travels/tooling improve resale, reducing perceived loss severity—this can tighten rate and down payment.

Business signals

• Use case & revenue math: programs/parts/week, hourly rate, throughput vs. current bottleneck, scrap/rework reduction.
• 3–6 months bank statements: steady deposits, few NSFs, visible headroom for the payment.
• Customer concentration & backlog: POs, MSAs, or letters of intent help.
• Operators & programming: trained staff + CAM (e.g., Mastercam/Fusion) reduce ramp risk.

Private-lender terms you’ll actually see (Canada, 2025)

• Structures:
  • Lease-to-own ($10/$1 buyout) for long-life keepers you’ll amortize through full useful life.
  • FMV/Residual (often 10–20%) to lower the monthly and plan for upgrades.
  • Sale-leaseback/refinance on owned CNCs to raise cash for tooling, workholding, or second shift.
• Term length: 36–60 months typical; 72 months possible on late-model, well-maintained machines with strong resale.
• Down payment: 0–10% on strong files and dealer machines; 10–30% for startups, private sales, older/high-hour units, or softer credit.
• Conditions: PPSA filing, documentation fee, first/last in advance, proof of insurance (lender as loss payee), inspection/rigging as required.
• Funding speed: With complete documents and insurance ready, same-week funding is common.

Get a ballpark payment with our calculator, then we’ll price your file precisely.

Bank vs. Private Lender: quick verdict

• Bank/credit union: Lowest headline rates, heavier financial packages, tighter on age/controllers/private sales.
• Private (B/C/D): Faster, flexible on used/private sale and sale-leaseback, comfortable with A/B/C/D credit, and open to milestone-based funding (deposit → delivery → install → runoff).

If a bank stalls, we often restructure via Refinancing & Sale-Leaseback or overlay Working Capital/LOC for tooling, fixtures, and initial payroll.

The approval playbook (step-by-step)

1) Pre-qualify the machine before you haggle
Collect the credit-critical specs and proof of condition:

• Make/model/year, controller version; spindle/cycle hours with photos.
• Ballbar or laser report, backlash measurements, maintenance log.
• Photos: all sides, spindle & tool changer, table/ways, electrical cabinet, serial plate, screen/controller.
• Accessory list (chip conveyor, coolant-through-spindle, probes, 4th/5th axis).
• For private sale: bill of sale, seller details, lien search & release.

2) Choose a structure that matches your exit

• Keep 5–10 years? $10/$1 buyout.
• Plan to upgrade at tech inflection (5-axis, bigger travels)? FMV can keep payments lower and ease replacement.
• Need cash + machine? Sale-leaseback on owned equipment funds tooling/fixtures while keeping uptime.

3) Tell the revenue story

• Parts/programs per week, cycle time reduction, scrap savings, set-up reduction with probing/fixtures.
• POs or MSAs, capacity charts (before/after), or rental-replacement math if you’re subbing work.

4) Clean up the banking signal (30 days pre-submit)

• Reduce NSFs, keep balances healthy, consolidate transfers. If receivables are lumpy, layer Invoice Factoring on anchor customers.

5) Pre-clear insurance & rigging

• Binder naming lender as loss payee; rigging/transport quotes ready so we can align draws to delivery/install/runoff.

6) Submit a one-touch package

• Application, IDs (≥25% owners), corporate registry
• Invoice/quote, photo set, accuracy/maintenance docs, lien search/release (private sale)
• 3–6 months bank statements, insurance broker contact
  Upload once via Leasing & Loans—we route to best-fit lenders the same day.

Snapshot: $10 buyout vs. FMV for CNC

CNC documents that accelerate approvals (copy/paste checklist)

• Invoice/quote with full spec: travels, spindle HP/RPM, ATC size, options, controller version.
• Photos: serial plate, controller screen (hours), table/ways, spindle, electrical cabinet, peripherals.
• Accuracy/maintenance: ballbar/laser report (if available), backlash readings, PM logs.
• Private sale: bill of sale, seller ID/company, lien search & release, inspection notes.
• Install/rigging: site power (voltage/amps), air, floor plan, rigging quote, run-off plan.
• Business banking: 3–6 months statements, recent AR snapshot (optional).
• IDs for owners ≥25%; corporate registry.
• Insurance binder (lender as loss payee) ready to issue on approval.
• Use-of-funds memo: parts/programs/week, cycle time, scrap reduction, payback months.

Budget the “true monthly,” not just the payment

• Insurance (equipment scheduled, correct loss-payee wording)
• Tooling & workholding (vises, chucks, collets, probes, fixtures)
• CAM & posts (licenses, maintenance plans)
• Maintenance (spindle rebuild reserve, way lube, coolant, filters, belts, encoders)
• Rigging & training (set-up days, operator upskilling)
• Downtime buffer: target 1–1.5 payments for unplanned repairs

If tooling threatens cash flow, pair the lease with a small LOC or factoring so payroll and consumables aren’t squeezed.

Tough-file tactics (how we still get to “yes”)

• Older/high-hour machine: Shorter term + modest residual + maintenance docs; consider spindle assurance.
• Startup job shop: 10–20% down, co-signer or collateral, cleaner 90-day bank behaviour, initial POs.
• Private sale from another shop: Extra diligence (photos, lien release, inspection, basic runoff video).
• Cash-tight ramp: Sale-leaseback/refi on owned equipment to fund tooling/fixtures; overlay working capital for first 60–90 days.

Case pattern (Ontario precision fab)

A 2-year shop needed a late-model vertical mill with 4th axis and probing to bring profitable parts in-house. Bank hesitated on private sale + thin retained earnings. We placed a 48-month FMV lease with a private lender: 15% down, first/last in advance, insurance binder same day, payoff funded on delivery. We added a $50k LOC for tooling and a small factoring line on one anchor customer. Result: faster lead times, reduced outsourcing, and stable cash conversion through ramp-up.

FAQs

Can I lease a used CNC from a private seller?
Yes. Private lenders fund private-sale CNCs routinely with extra diligence (inspection, bill of sale, lien search/release). Start here: Leasing & Loans.

Is FMV or $10 buyout better for CNC?
If you’ll keep the machine long term and want predictable total cost, choose $10/$1 buyout. If you plan regular upgrades or need lower monthly payments, FMV is worth exploring.

What credit score do I need?
Banks often prefer 650–700+ with strong financials. Private lenders can work below 650 with compensating factors (down payment, contracts, co-signer, collateral). Contact our credit analysts for a tiered quote.

How fast can funding occur?
With documents and insurance ready, 24–72 hours from approval is common. For estimates, try our calculator.

Can I raise the down payment without draining cash?
Yes—use a sale-leaseback/refinance on owned equipment, or a small LOC. If receivables are slow, consider factoring.

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Why Mehmi (seller + financier, Canada-wide)

We aren’t just a broker. We sell commercial assets and finance them—daily. Our credit team knows real auction values, controller realities, spindle risks, and the flags underwriters spot instantly. We place files across 30+ Canadian lenders, deliver 24–48h approvals for deal-ready applications, and tailor structures to your parts mix and seasonality.

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Next step: Lining up a specific CNC—or want a clean pre-approval before you negotiate? Feel free to contact our credit analysts for a friendly, pressure-free review: Contact Us. Prefer to start with numbers? Use the calculator and we’ll show FMV vs. $10 buyout side-by-side.