Manufacturing Equipment Financing

If there ever was a capital intensive industry manufacturing has certainly taken the cake. Operating a manufacturing facility is difficult for so many reasons, but the most difficult part has got to be being able to afford all of the equipment that comes with a manufacturing plant.  Financing your manufacturing equipment isn’t a back up plan for most business owners, it is a must.

Benefits of Manufacturing Equipment Financing

Here are a couple of quick considerations for why you may want to finance or lease your Manufacturing Equipment:

• Preserve Cash
• Flexibility of Keeping or Returning Equipment
• Avoid the Pitfalls of Technical Obsolescence
• Tax Benefits
• Improves Debt Ratios
• Fixed Rate and Payment Options
• 100% Financing

As always, and especially today, cash is king. If you can manage to finance your largest assets and save your cash for other working capital needs, your business will be able to stay ahead of the pack. The most important thing to keep in mind is that your manufacturing equipment is an income producing asset, and it will pay for itself.

Types of Manufacturing Equipment

Generally speaking, most manufacturing equipment is considered to be good collateral. Larger pieces of equipment like the ones mentioned below can be financed from 1 to 7 years:

• Food Processing Equipment
• Canning/Bottling Lines
• Filtration Equipment
• Polishing/Finishing Equipment
• Packaging Equipment
• Extrusion Equipment
• Air Compressors
• Shrink Wrapping
• Welders

It is not easy replacing large, complex pieces of equipment like this on a regular basis. A couple of considerations for that thought is deciding between a capital lease and operating lease. A capital lease will offer you the ease of purchase at the end of the lease term and allow you to keep the depreciation. The operating lease can potentially get you to a lower monthly payment and allow you to improve your debt ratios. And if you can afford the payments, it may also be a good idea to choose a shorter financing term in order to avoid committing your business to a long term lease or loan. Which ever option you choose, you can rest easy that you will not pay a single dollar for that piece of equipment until it earns you a dollar.