Asset Finance for Manufacturing
Get in touchBeing able to finance manufacturing equipment can be expensive. If you are wanting to purchase manufacturing assets, you want to be able to do so without restricting your company's cash flow.
No matter how you function in the manufacturing sector, whether you need food processing equipment or other kinds of assets or machinery, there are many benefits to being able to do this with seasonal payments and plans!
What is Asset Finance for Manufacturing Equipment?
Asset finance for manufacturing is an integral part of any industry and can help you to acquire the assets that you need to properly run your company.
Identifying finance solutions to ensure that you are able to purchase the equipment that will be required to run a business is extremely important.
Why Use This Form Of Financing?
Whether you are hoping to acquire stock to start a new company or want to purchase food processing equipment that will take your company to the next level, finding ways to fund the costs involved with new equipment to build existing assets is an integral part of any company!
In the production and manufacturing industry, having assets that can be used to grow a company is extremely important.
How does Manufacturing Finance Work?
Asset finance for the manufacturing industry works by reducing the financial pressures that manufacturers have and offering a way for them to gain access to money for manufacturing on the basis that they will sell the product they make and pay back the amount at a later stage as a sort of lease.
This kind of financing is an integral part of the industry, and having Manufacturing finance solutions can help businesses to be successful.
Why is This Kind of Investment Important?
Without this kind of investment, you would have to come up with the capital to grow on your own. This may lead you to take out expansive loans in order to invest back into your company.
How does this investment help a company?
The support given from asset finance can ensure that you avoid doing this and allow you to work closely with those who understand your company and its needs, helping to make you and your customers happy.
Manufacturing Finance Solutions
There are many different ways that asset finance can be used to expand manufacturing and production.
Having manufacturing assets can help you to grow your company without having to put the capital down yourself, which ultimately could put the company at risk.
The following is a look at a few ways that you can use asset finance in manufacturing for your company.
Hire Purchase
Hire purchase refers to a type of plan where you are able to pay the money back on an agreed timescale. This allows businesses to have the working capital to purchase materials and develop products and then sell them back to the customer to gain a profit.
This made profit can then go towards paying the money that was loaned to the company.
What is Hire Purchase?
A company will own the asset outright but simply make payments on the loan over a given period of time. Using a hire purchase is often preferred by many businesses and can help increase cash flow without putting the finances of a business at risk.
Capital Lease
This is when a piece of equipment is purchased by the lessor and leased to you, offering you the opportunity to gain access to the equipment needed within your industry without paying the cost of the full product.
How Does Capital lease Work?
This form of finance can help create residual value in your company and ensure that you meet the needs of customers without putting your cash flow at risk.
Finance Lease
A finance lease helps businesses in the manufacturing sector by allowing for a company to temporarily lease out the requirement that they need.
How Does Finance Lease Work?
Finance leases work by allowing a business to rent out the machinery that they require without having to purchase it. Interest rates and rental costs are varied according to the needs of the company!
Operating Lease
Similar to a finance lease, an operating lease is based on renting machinery but at the cost of the value of the machine based on how it depreciates.
How Does an operating lease work?
As a piece of machinery gets older, the amount that you pay when renting it also goes down. This ensures that a business will pay for the quality of the product that they are renting.
What are the Interest Rates for Manufacturing Equipment?
One of the benefits of this kind of financial assistance is that the interest rates vary according to the product and size of the loan. The interest rates on manufacturing finance range from 2%-20%.
This comprehensive range of interest rates helps build manufacturing assets in the purchasing of equipment without businesses having to put down their own capital to do so.
In the manufacturing sector, this is quite important and having specialist knowledge in this area is vital! The ability to have this machinery and ownership without a hefty cost can help push a business forward and be successful.
What Manufacturing Equipment can be Financed?
The following is a look into the types of equipment and machinery assets that can be financed:
Production line
Food processing equipment
Packaging equipment
IT Support
What are the Benefits of Asset Finance?
Creating value in your company through this kind of loan can help those in the manufacturing industry increase cash flow and pre-tax profits. This type of financing helps businesses in many different ways.
Charges and payments are fixed
Businesses will be able to select finance plans that suit their needs with payment plans that cost the same each month. Manufacturers have a better understanding of the cost of their assets through this type of plan!
Asset financing is suited to you and your needs
No company is the same, and as the needs of each company in the industry may differ, you want to be sure your asset finance is being focused on your unique requirements.
This helps you to better serve and support your customers, who are ultimately the ones who create value and purchase the assets that you produce.
Preserves Other Finance and Credit Lines
In the manufacturing industry, it is important that you have the ability to access loans when needed. Doing this for manufacturing equipment can restrict businesses from getting loans for other, more important things.
How Does This Help a business?
With assets and items of value being paid for without credit lines being used, you can ensure that the value of your company is maintained, allowing you to focus on other things that will make your customers happy.
Summary
Funding assets for your manufacturing company is an important part of increasing profits and keeping your customers satisfied. Creating residual value can ensure that your business remains successful and that credit lines are not jeopardised.
For more information on how we can help your company get the assets that it needs to be successful, do not hesitate to contact our team of experts in this field!
We are here to ensure that you succeed and that your company is as profitable as possible!
Please note we are commercial finance brokers, not a lender. It's important to work with a company that's authorised and regulated by the financial conduct authority (FCA).