I've paid a large deposit on machinery and now I'm tight until it starts earning

The gap that catches directors out

You have committed a large deposit against new machinery. The supplier has been paid, or a stage payment is due, but the equipment is not yet installed, commissioned, or bringing in the revenue it was bought to generate. On paper the investment makes sense. In the bank account, it looks like a hole.

This is different from ordinary tight cash flow. It is a known, self-inflicted gap with a known end date — the machine goes live, output or capacity increases, and the numbers should improve. The trouble is everything in between: payroll, rent, supplier terms and tax still fall due on the old schedule, while the new asset contributes nothing until it is running.

Directors often underestimate how long commissioning, training or ramp-up takes, and the deposit itself can be larger than expected once installation, calibration or ancillary costs are added. The squeeze is real even though the underlying decision was sound.

How companies handle it

Some companies simply absorb it from existing reserves, treating the gap as a planned dip they can ride out because they built a buffer in before ordering. That is the cleanest route if the cash is genuinely spare and not needed for anything else.

Others renegotiate with the machinery supplier directly — spreading the balance over instalments tied to delivery or commissioning milestones rather than paying it all upfront, or asking for extended terms on ancillary costs like installation and training.

Trimming other outgoings for the interim period is another route: pausing discretionary spend, deferring a non-critical purchase, or asking your own customers for earlier payment on invoices. Where none of that closes the gap, a short-term finance facility sized to the commissioning period is a further option, used specifically to cover the interval between outlay and the asset earning, rather than as a permanent fix. Which combination makes sense depends on how long ramp-up genuinely takes and what else the business has in reserve.

Match the bridge to the commissioning timeline, not the invoice

The core discipline here is timing the fix to when the machinery actually starts contributing, not to when the deposit was paid. If you cover the gap with finance, or with drawn-down reserves, the exposure should be tied to installation and commissioning, plus a realistic ramp-up period before output or throughput reaches the level the investment was justified on.

Get this wrong in either direction and it costs you: cover too short a period and you are back in a squeeze when commissioning overruns, which it commonly does. Cover too long and you are paying for cover you no longer need once the machine is earning. Ask your supplier or installer for a realistic commissioning and ramp-up estimate before you size anything, rather than working from the optimistic date in the original quote.

What it means for you

A large deposit on machinery creates a defined, temporary gap between spending and earning — it is not a sign the investment was wrong, just a phase that needs managing deliberately rather than absorbed by accident. Look first at reserves, supplier terms and other levers before assuming finance is the answer.

If you do bridge the gap externally, size and time it to the commissioning and ramp-up period specifically, informed by your supplier's realistic timeline rather than the order paperwork. As an exempt business lender, Credicorp can talk through options for covering this kind of interval if that is the route that fits, without it being the only answer on the table.