Asset Finance for Plastics Equipment
Get in touchWe are a specialist asset finance company and have a lot of experience dealing with plastic equipment companies.
Late payment culture in the UK causes a clear cash flow challenge for firms in the plastics industry - you need to pay for raw materials, operating costs, and personnel, but you have to wait 30, 60, or even 120 days to get paid.
You may also need to purchase manufacturing equipment or machinery to expand your business, but you lack the funds to do so.
Perhaps you have the potential to boost sales, purchase another business, or participate in a management buyout.
There are several funding options of asset finance accessible if equipment purchase is not within budget, such as equipment finance, equipment loan, invoice finance, and flexible company loans.
Get in touch and let's take a look at a few of these to help you work out which of these finance solutions for your essential equipment is the best option for your production needs.
What is Plastics Equipment Asset Finance?
Plastics industry companies utilise assets finance to purchase the equipment they need to expand.
You rent the asset for a specified duration with regular, fixed monthly payments and acquire it at the end of the agreed term with Hire Purchase.
This is a great machinery finance option for those who can rely on regular cash flow.
Your business may continue to use the asset while also benefiting from a cash infusion directly into your firm.
This is ideal for many people in need of recycling equipment finance, taking the cash pressure off (a major issue in the recycling industry) and providing finance solutions while you use your plant machinery.
What are the Types of Asset Financing for Plastics Equipment?
There are many different types of asset financing available for plastics industry equipment assets, helping you spread the cost a bit.
Let's take a look at some of the most popular leasing and finance options for construction machinery for businesses in the plastics industry.
Hire Purchase
Hire Purchase allows your business to purchase an asset while paying for it in instalments over a predetermined period of time - the term. With hire purchase, you have the opportunity to buy it outright at the conclusion of the term.
It allows you to stretch the expense of your investment across the life of the asset, making budgeting easier.
Hire Purchase is ideal for obtaining resellable assets, machinery, construction equipment, and commercial equipment.
Finance Lease
Finance Lease agreements allow you to utilise the equipment your business requires without having to purchase it completely. E.G; extrusion equipment leases.
With finance lease, you pay rent to get full access to it. The leasing duration is adaptable and may be adapted to your specific requirements and cash flow. You will pay the full cost of the asset, including interest, over this term. When the primary lease term expires, you have the option to:
Enter a secondary rental period to continue using the item.
Sell the asset and keep a percentage of the proceeds.
Return it to the investors.
Asset Refinance
Refinancing (Capital Release) is a rapid way to extract cash from current balance-sheet assets and utilise that value elsewhere in your business, such as to pay a deposit on new equipment or alleviate cash flow.
Capital release is a sort of remortgage that may be utilised against almost any type of equipment, making it appropriate for businesses of all sizes, even solo proprietors.
Repayments are determined based on the revenue stream provided by the asset, and you own the asset at the conclusion of the refinancing period.
Operating Lease
An Operating Lease enables you to hire the asset while you need it, much like a Finance Lease does.
An Operating Lease only covers a portion of the asset's useful life, which is the main distinction between the two.
Since the cost is determined by the discrepancy between the asset's initial purchase price and its residual value at the conclusion of the lease, you pay a lower rental amount.
You do not have to worry about getting rid of the item or recovering its residual worth; you can use it fully for as long as you need it.
Benefits of Asset Finance in the Plastics Industry
There are many benefits to financing your business assets and machinery.
Different finance products offer different advantages, but long-term relationships with financiers generally support benefits like:
Quick access to the asset you need without a significant up-front commitment thanks to the low initial outlay
Full access to the asset without having to pay for it outright.
Flexibility - Ability to choose whether to re-rent, buy, or return the asset at the end of the term.
Pay less - Rent is less expensive because it is calculated as a percentage of the initial capital expense.
Financing off-balance sheet.
Reclaim VAT on rentals to cut costs.
What Type of Equipment can be Financed for Plastics Companies?
Vacuum machinery
Label machinery
Vertical machining centres
Injection moulding machines
Window manufacturing machinery
Bottling machinery
Packaging machinery
Summary
From invoice finance to a short-term cash injection, businesses in the plastics industry often need a bit more financial support to allow access to new assets and working capital.
Meeting these business needs is easy with asset finance, avoiding the need for unreliable personal guarantees or the delays of working with local authorities for funding.
With asset finance, your business can get a quick cash injection for more working capital and still keep using your essential machinery for business operations in the industry.
Your initial investment in machinery can be much smaller like this, making it much easier for new businesses in the industry to access the plastics machinery that they need.
Get in touch with us today to find out more!