Pallet racking finance
Racking pays for itself in pallet positions, but once it is bolted to the floor a funder stops seeing an asset and starts seeing a fixture.
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Can you finance pallet racking?
Yes, but understand how it is treated. Racking is the classic semi-fixed asset: once anchored to the slab it becomes part of a building you may not own, dismantling costs real money, and second-hand beams and frames sell for a fraction of new. So funders underwrite racking mainly against your business rather than against the steel, and a landlord waiver is sometimes asked for. That does not make it unfundable — it is funded every week — but expect it to be assessed on your trading strength, and expect better terms if it is bundled with forklifts.
Used kit: Rarely — second-hand racking is bought and sold in the trade, but funders will seldom lend against used racking as the recovery value barely covers the cost of removal.
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What would pallet racking cost per month?
Business asset finance is quoted on a flat rate, so that is what this shows — with the equivalent APR underneath, because the two are not the same number. A quick guide only; your actual rate depends on the asset, term, deposit and lender.
Representative example: on Hire Purchase, borrowing £25,000 over 48 months at a 6.0% flat rate (equivalent to 11.5% APR representative), you would repay around £646 a month; total amount repayable approximately £31,000, of which £6,000 is the cost of finance. This calculator is for illustration only — it is not a quote or an offer of finance, and the rate and repayments you are offered will depend on the asset, term, deposit and your circumstances. CW Asset Finance is a credit broker, not a lender, and may receive a commission from the lender that funds your agreement. All finance is subject to status, affordability and lender approval. CW Asset Finance is an Appointed Representative of Rural Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630701).
How lenders treat it
This is the entry most warehouse operators need to read. Racking is priced by funders as soft or semi-fixed, for three reasons. It is anchored into a floor slab, usually in a leased building, so a funder cannot simply drive it away. The cost of stripping, transporting and re-certifying used racking often exceeds what the steel then fetches. And a used installation only suits a buyer whose building height and pallet dimensions happen to match. Practically, that means underwriting rests on your accounts, and some funders will want a landlord waiver confirming they can enter and remove. The single most effective thing you can do is present the racking alongside the trucks that work in it — the hard asset carries the soft one, and the blended package prices better than the racking alone.
Makes and models we fund
Examples of the machines we are asked to fund. This is not an exhaustive list — if what you are buying is not here, it does not mean we cannot fund it. Your supplier quote is what the agreement is written against.
| Machine | What it is |
|---|---|
| Dexion P90 | Adjustable pallet racking system |
| Dexion Speedlock | Boltless adjustable pallet racking |
| Link 51 XL | Wide span adjustable pallet racking |
| Link 51 Drive-In Racking | High density drive in pallet racking |
| Stow Atlas | Beam and frame pallet racking system |
| Stow Mobile Racking | Mobile base pallet racking |
| Apex Adjustable Pallet Racking | Standard beam and frame racking |
| Redirack Pallet Racking | British made adjustable pallet racking |
| Mecalux M7 | Adjustable pallet racking for standard pallets |
| Mecalux Pallet Shuttle | Semi automated high density racking |
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Who buys one
Businesses moving into a new unit or reconfiguring an existing one after outgrowing floor stacking. Typically a wholesaler, importer or manufacturer whose stock has doubled and whose aisles have disappeared. The trigger is a lease signed on a bigger building, a customer requiring proper stock traceability, or a warehouse audit that has flagged damaged, mismatched or overloaded frames that cannot safely stay in service.
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How it is treated for tax
Bought on hire purchase, business plant and machinery normally qualifies for capital allowances on the full cost even though you pay for it monthly, which is a large part of why hire purchase is the common structure. On a finance lease you generally set the rentals against profit instead. The rules change between budgets and your position depends on how you trade, so treat this as the direction of travel and get your accountant to confirm the detail before you commit.
Pallet racking finance questions
What is a landlord waiver and will I definitely need one?
It is a short agreement in which your landlord confirms they will not claim the funded equipment as part of the building and will allow the funder access to remove it. Not every funder insists, but on a large racking installation in a leased unit it is a common condition. It is usually straightforward to obtain.
Why is racking harder to finance than a forklift that costs the same?
Because of what happens if the agreement fails. A forklift is driven onto a lorry and sold within days. Racking has to be dismantled by specialists, transported, inspected and then sold to a buyer whose building happens to suit it. The net recovery is a small fraction of the original cost, so funders lean on your covenant instead.
Does it help to include the forklifts in the same application?
Considerably. A package containing reach trucks and racking has real asset backing, whereas racking presented alone is close to unsecured lending with extra steps. Funders price the blend, so the whole project often costs less to fund together than the racking would on its own.
Can the installation labour be included?
Usually yes, where it appears on the supplier invoice as part of the turnkey price. Funders accept that racking is worthless in a pile on the floor and that installation is integral. What they will not fund is unrelated building work smuggled onto the same invoice, so keep the scope clean.
Do we still need SEMA rack inspections on financed racking?
Yes. Ownership structure has no bearing on your duties as the operator. Racking should be inspected by a competent person at appropriate intervals and damaged components replaced. Funders will not chase you for this, but a well-maintained installation is safer, lasts longer and is worth more if it is ever moved.
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Not an offer of finance. All finance is subject to status, affordability and lender approval.
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