Manufacturing company with HMRC arrears
UK manufacturing files with HMRC arrears are declined by mainstream banks but funded routinely by specialists. Three live routes: invoice finance against the manufacturing debtor book, asset finance against owned plant, and specialist working capital. The right route depends on what security exists and how the HMRC situation is structured (active TTP vs uncovered arrears vs enforcement-stage). Active engagement with HMRC strengthens every lender application.
Route 1: Invoice finance against manufacturing receivables
If you sell B2B to named main customers (tier-1 OEMs, contract customers, distributors) with consistent 30 to 90 day payment cycles, invoice finance is usually the cleanest route. The receivables are the security so the underwriting focus is debtor quality rather than the HMRC status.
- Bibby Financial Services, largest UK independent, manufacturing-aware
- Close Brothers Invoice Finance, FTSE 250 banking, lowest service charge from 0.5%, sister to Close Brothers Asset Finance for combined facilities
- IGF Invoice Finance, long-standing engineering and metals specialist, no-minimum-turnover positioning
- Ultimate Finance, highest UK advance rates (up to 95%), faster setup
See Close Brothers for manufacturing on our sister site for the detailed comparison.
Route 2: Asset finance against owned plant
Sale-and-leaseback against owned manufacturing plant (CNC, presses, fabrication kit, commercial vehicles) releases 70 to 90% of current market value as cash. The asset is the primary security so HMRC arrears are not a hard decline.
- Aldermore, established challenger, FCA + PRA dual regulated
- Close Brothers Asset Finance, sister to Close Brothers Invoice Finance
- Time Finance, UK challenger specialist on plant and vehicles
- Bolton Finance, specialist asset and bridging, comfortable with adverse history
Route 3: Specialist working capital
If invoice finance and asset routes do not fit, specialist post-decline working-capital lenders engage with HMRC arrears at premium pricing.
- Bizcap, engages with HMRC arrears routinely
- JPM Capital, for files Bizcap has declined
Active TTP strengthens every application
Before approaching any lender, agree a Time to Pay arrangement with HMRC if you have not already. TTP demonstrates engagement, creates a predictable repayment schedule, and meaningfully improves the underwriting reception. Most lenders prefer to see active TTP rather than uncovered arrears; some specifically require it.
See all HMRC scenarios for the dedicated routing per situation (VAT, PAYE, Corporation Tax, CIS), and our PAYE arrears funding page if PAYE is the specific issue.
FAQs
Will lenders fund my manufacturing business if I have HMRC arrears?
Specialist UK lenders will, mainstream banks generally will not. HMRC arrears are visible to lenders as soon as they pull a credit report or ask, and most clearing banks auto-decline at that point. Specialist working-capital lenders, asset-finance routes against owned plant, and invoice finance against the debtor book all engage with HMRC arrears on a case-by-case basis. Pricing reflects the risk but routing is real.
Which UK lenders engage with manufacturing-HMRC-arrears files?
Three live routes. (1) Specialist invoice finance against the manufacturing debtor book: Bibby Financial Services, Close Brothers, IGF, Ultimate Finance, receivables are the security so HMRC status is one underwriting factor among many. (2) Asset finance against owned plant, CNC, vehicles: Close Brothers Asset Finance, Aldermore, Time Finance, Bolton Finance, the asset is primary security. (3) Specialist working capital: Bizcap and JPM Capital for cases where invoice finance and asset routes do not fit.
Should I agree a Time to Pay with HMRC first?
Generally yes. HMRC Time to Pay (TTP) is an arrangement allowing tax debt to be paid over an extended period (typically 6 to 12 months for amounts under £100k, longer for larger amounts with director-personal-guarantee security). Most lenders prefer to see an active TTP rather than uncovered arrears: TTP demonstrates engagement with HMRC and creates a predictable repayment schedule. Some lenders specifically require TTP-in-place before advancing.
Will HMRC engage with me if I am simultaneously borrowing?
Yes. HMRC Debt Management views borrowing-to-clear-arrears as a positive: their obligation is met. They do not block lender drawdown or refinance unless the arrears situation involves fraud or trading whilst insolvent. Some lenders pay HMRC direct on drawdown to remove any ambiguity, particularly on R&D advance and VAT loan products specifically designed for HMRC clearance.
What if HMRC has issued a winding-up petition?
Much narrower routing. Once HMRC has filed a winding-up petition and it has been advertised in the London Gazette, the lender pool shrinks to a handful of specialist post-decline lenders, and most banks will freeze the account. Speed is critical: the cleaner action before the petition is filed is to agree TTP and settle within the 7-day pre-petition window. Once the petition is advertised, talk to a licensed insolvency practitioner before any further borrowing.
Does asset finance against my CNC machinery clear HMRC pressure?
Often, yes. Sale-and-leaseback against owned manufacturing plant (CNC, presses, vehicles) releases 70 to 90% of current market value as cash, which can clear HMRC arrears directly. The asset stays operational throughout. UK challenger and specialist asset-finance lenders (Aldermore, Close Brothers Asset Finance, Time Finance, Bolton Finance) handle this routinely; the asset is the primary security so the HMRC arrears are not a hard decline.
What if my arrears are PAYE specifically?
PAYE and NIC arrears are particularly material because HMRC treats them as held-on-trust money (employee tax not yet paid over). Penalties accrue faster, enforcement action is faster, and director personal liability for unpaid PAYE is possible in some cases. Specialist PAYE-arrears funding is available via the same panel; see our /hmrc/paye-arrears-funding/ page for the dedicated routing.
To get matched to manufacturing-HMRC-aware lenders: eligibility checker. Limited companies, LLPs and partnerships of 4+ only.