CNC Machine Leasing: Private Lender Guide

When a CNC mill, lathe, router, laser, or waterjet unlocks higher-margin work, a slow approval can cost you the job. Banks tend to hesitate on used machines, private sales, and growth-stage financials. Private lenders look at the asset + bank-statement reality and can move quickly—especially when the file is packaged the way underwriters actually read it.

Mehmi Financial Group is both a seller of commercial equipment and a financing partner with 30+ Canadian lenders. Below is the approval guide we use to place CNC deals—cleanly, transparently, and fast. If you want a pre-screen on your situation, feel free to contact our credit analysts.

What private lenders care about (and why)

The asset story (prove it’s productive and liquid)

• Make/Model/Year + Control: Fanuc, Siemens, Mazatrol, Heidenhain, Fagor, OSAI/B&R (routers).
• Hours & condition: Power-on, cycle, and spindle hours; backlash/ball-screw readings; way/guide condition.
• Spec fit: Travels, spindle HP/RPM, ATC size, live tooling/C-axis, bar capacity, 4th/5th axis, table size.
• Accuracy evidence: Recent ballbar/laser report, test cuts, maintenance log.
• Peripherals: Chip conveyor, CTS, probing, mist/dust collection, chiller, hydraulic/pneumatic packs.
• Install readiness: Voltage/phase/amps, air, rigging plan, floor location.

Why it matters: strong resale + lower failure risk = better advance, lower down, tighter pricing.

The cash-flow story (prove affordability)

• 3–6 months business bank statements (steady deposits, minimal NSFs, headroom for the payment).
• Pipeline proof: POs/MSAs, letters of intent, or insourcing math (parts/week, cycle-time cuts, scrap reduction).
• Operator/programming readiness: Trained staff, CAM licenses/posts.

Terms you’ll actually see in Canada (2025 reality)

• Structures:
  • $10/$1 buyout (lease-to-own) for long-life keepers.
  • FMV/Residual (10–20%) to lower the monthly and ease upgrades.
  • Sale-leaseback/refi on owned machines to fund tooling/fixtures or a second shift.
• Term length: 36–60 months typical; 72 months possible on late-model, well-maintained units.
• Down payment: 0–10% for stronger files/dealer machines; 10–30% for startups, private sales, older/high-hour, or softer credit.
• Conditions: PPSA filing, documentation fee, first/last in advance, proof of insurance (lender as loss payee), inspection/runoff as required.
• Speed: With a complete package and insurance ready, 24–72 hours from approval to funding is common.

Run ballpark numbers with our calculator, then we’ll price the file precisely.

Bank vs. Private Lender: quick verdict

• Bank/credit union: Best headline rates, heavier financials, tighter on age/controllers/private sales.
• Private (B/C/D): Faster decisions, flexible on used and private sale, comfort with sale-leasebacks and milestone funding (deposit → delivery → install → runoff).

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

Approval playbook (step-by-step)

Pre-qualify the machine before you haggle

Collect the credit-critical proof up front:

• Make/Model/Year, control version, spindle/cycle hours (photo of screen)
• Ballbar/laser report or recent accuracy check; maintenance log
• Photo set: all sides, table/ways, spindle, ATC, electrical cabinet, serial plate, controller screen
• Accessory list (CTS, probes, 4th/5th axis, conveyors)
• Private sale: bill of sale, seller details, lien search & release

Choose the right structure for the job mix

• Keep 5–10 years → $10/$1 buyout
• Plan upgrades or need lower monthly → FMV/Residual
• Need cash + machine → sale-leaseback on owned equipment

Explore options or submit in one shot via Leasing & Loans.

Tell the revenue story clearly

• Parts/programs per week, cycle-time delta, set-up reduction (probes/fixtures), scrap improvement
• POs/MSAs or insourcing math vs. subcontracting

Clean up banking 30 days pre-submit

• Reduce NSFs, keep average daily balances healthy, simplify transfers
• If receivables are lumpy, layer invoice factoring so deposits land predictably

Pre-clear insurance & rigging

• Binder naming lender as loss payee; rigging/transport quotes and runoff plan aligned with funding milestones

Submit a one-touch package

• Application; IDs for owners ≥25%; corporate registry
• Invoice/quote, photo set, accuracy/maintenance docs; lien release (private sale)
• 3–6 months bank statements; insurance broker contact
  We route to best-fit lenders the same day.

Snapshot: $10 buyout vs. FMV for CNC

Document checklist (copy/paste)

• Invoice/quote with travels, spindle HP/RPM, ATC size, options, control version
• Photos: serial plate, controller hours screen, table/ways, spindle, ATC, electrical cabinet, peripherals
• Accuracy/maintenance: ballbar/laser (if available), backlash readings, PM logs, test cuts
• Sale type: dealer invoice or bill of sale + seller ID/company + lien search & release (private sale)
• Install/rigging: power/air specs, rigging quote, floor plan, runoff plan
• Business banking: 3–6 months statements
• IDs (owners ≥25%) + corporate registry
• Insurance binder (lender as loss payee) ready on approval
• Short use-of-funds memo (throughput, savings, payback)

Budget the “true monthly,” not just the payment

• Tooling & workholding (vises, chucks, collets, fixtures, probing)
• CAM & posts (licenses/maintenance)
• Maintenance (way lube, coolant, filters, belts, encoders; spindle reserve)
• Rigging & training (set-up days, operator upskilling)
• Downtime buffer: hold 1–1.5 payments for unplanned repairs

When cash is tight, pair the equipment lease with a modest LOC so consumables and payroll aren’t squeezed during ramp-up.

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

• Older/high-hour machine: Shorter term + modest residual + maintenance docs; include test cuts or runoff video.
• Startup job shop: 10–20% down, co-signer or cross-collateral, cleaner 90-day banking, initial POs.
• Private sale: Extra diligence (photos, lien release, inspection). We manage the paper trail.
• Cash-tight launch: Sale-leaseback/refi on owned equipment to fund tooling/fixtures; add factoring for predictable deposits.

Case pattern (Ontario precision fab)

A 2-year shop moved from subcontracting to in-house machining with a late-model vertical mill (4th axis, probing). Bank hesitated on private sale + thin retained earnings. We placed a 48-month FMV lease: 15% down, first/last in advance, insurance binder same day, payout on delivery. We added a $50k LOC for tooling and a small factoring line on one anchor customer. Result: faster lead times, better margins, and smooth cash conversion through ramp-up.

FAQs

Can I lease a used CNC from a private seller?
Yes—private lenders fund these routinely with inspection, bill of sale, and lien search/release. Start here: Leasing & Loans.

Is FMV or $10 buyout better for CNC?
Keep long term → $10/$1 buyout. Expect upgrades or want a lower monthly → FMV/Residual.

What credit score is needed?
Banks often want 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 happen?
With documents and insurance ready, 24–72 hours from approval is common. For ranges, try the calculator.

Can I raise a down payment without draining cash?
Yes—use a sale-leaseback/refi on owned equipment or a small LOC; stabilize receivables with factoring if needed.

‍

Why Mehmi (seller + financier, Canada-wide)

We sell commercial assets and finance them—daily. Our credit team understands real auction values, controller realities, spindle risks, and the red flags underwriters spot instantly. We place files across 30+ lenders, deliver 24–48h approvals on deal-ready packages, and tailor structures to your parts mix and seasonality.

‍

Next step: If you’re pricing a specific CNC—or want a clean pre-approval before you negotiate—feel free to contact our credit analysts for a friendly, no-pressure review: Contact Us. Prefer to start with numbers? Use the calculator.