Manufacturing Equipment Financing Offers Flexibility When You Need It Most

Manufacturing Equipment Financing Offers Flexibility When You Need It Most blog post image

Affording Automation: Manufacturing Equipment Financing Offers Flexibility When You Need It Most

Whether you’re a CNC-powered machine shop or a fast-growing injection-molding operation, the labor shortage threatens near-term financial performance and long-term growth plans alike. This seismic shift in access to skilled and unskilled labor has many sectors of the manufacturing industry exploring new investments into automation. The three core areas of capital investment are:

Fixed Automation:

  • Chemical manufacturing processes
  • Assembly lines
  • Material conveyor systems

Programmable Automation:

  • Robotics
  • Material handling systems
  • Warehouse automation

Flexible Automation:

  • Industrial robots
  • Numerically controlled (NC) machine tools
  • Programmable logic controllers

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Key benefits associated with these investments are increased workplace safety, better quality, enhanced productivity, and the low operating costs from having less human capital devoted to manufacturing processes. But the benefits are not without significant investment requirements in a time when capital budgets may be under pressure. 

In today’s marketplace, when manufacturing industry expertise and innovative lending capabilities are lacking with bank lending, growth is limited. Solving this challenge often requires looking beyond the sameness of traditional lending and seeking the unique benefits of a strong, independent machine tool or manufacturing equipment lender. With a bit of out-of-the-box thinking and exploring the value of an independent lender, you can cost-effectively make the investment in new automation with confidence—even in less favorable business cycles.

What is an Independent Equipment Lender?

Banks are necessary for economic success and undoubtedly beneficial to the manufacturing innovators in the market today. But as banks have become exponentially larger and their scope of services has expanded to riskier activities, regulation has increased accordingly. As such, bank decision-making must happen in the construct of a regulatory environment that simply doesn’t always align with the pace, flexibility, and creativity required for the capital needs of evolving manufacturing trends and technologies—leaving a void in the market.

Independent lenders raise their own capital to offer specialty financing without the regulatory, process, and bureaucratic obstacles banks are required to operate within. They can move faster, be more flexible, and bring unique expertise in the specific equipment or asset type of financing or industry. This adaptability is especially attractive for executives seeking manufacturing equipment leasing or financing for innovative new machine tools, material handling automation, or specialized IT projects including enterprise resource planning (ERP), quality control, warehouse management, and big data tools. Independent equipment lenders fill the void left by traditional lenders.

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Independent Equipment Lender Advantages

What if a unique payment structure for programmable CNC equipment that aligns with new customer revenues could help you scale growth while competitors are struggling to find skilled labor? Could lower up-front cost of desperately needed injection molding technologies reduce dependency on employees for production? Could a short-term lease of robotics technology help you win customers unwilling to commit to long-term contracts? 

These are only a few of the questions that demonstrate the flexibility and reach offered by independent manufacturing equipment lenders. With a deeper understanding of manufacturing equipment use and life, OEMs, automation trends, and project investments, an independent can create truly customized and powerful payment solutions. 

But flexibility extends beyond finance structure. It extends to finance approvals. Traditional lenders are bound by credit policies that are rarely built from knowledge of a specific industry and even more seldom tailored from business to business. Independents can dig deeper into your story instead of relying only on a history of financial performance. The result may yield access to more capital, better financial structures, or approval of needs traditional lenders avoid. 

Beyond approval and access to capital lies the most undervalued benefit independents bring to the needs of manufacturing leasing, and industry expertise. Independents understand the technology, resale implications, and residual values. They combine that knowledge with an expert-level interpretation of an innovator’s issues to offer strategic direction. Working with independents can help manufacturing leaders develop a plan to acquire, finance, manage and dispose of equipment to maximize cash position, cash flow, and ultimately, profit. 

What to seek in an Independent Equipment Lender?

Finding the right independent manufacturing equipment lender may be easier than you think. Here are several key attributes to consider that are ultimately paramount to your success in acquiring capital for automation upgrades:

  • Years of Experience. It’s important that a lender has demonstrated success with a wide variety of manufacturing technologies and company applications.
  • Geographic reach and financing solutions. Ensuring lenders have a full complement of manufacturing equipment leasing and loan structures that can be deployed throughout the United States and Canada is essential.
  • Broad credit appetite. The financial ups and downs of manufacturing-related businesses are part of being in the business. A strong manufacturing lender should seek to understand and overcome these issues.
  • Financial strength. A good lender can use its own balance sheet to maximize flexibility and competitive offerings.
  • All kinds of equipment and dollar amounts. New or used, stock or custom—the right manufacturing finance provider can offer to finance both small and large capital needs. 

NFS: The ‘Story’ Credit Lender To Power Automation

NFS Leasing has funded the manufacturing equipment and project needs of early-stage, turnaround, and high-growth firms for 16 years. With over $1B in capital deployed to companies requiring funding beyond the limitations of traditional lending, we are committed to digging deeper, getting creative, and solving the problems that empower you to capitalize on the market opportunities. 

If you have a piece of equipment, project, or unique manufacturing equipment leasing or financing need, let’s talk. NFS Leasing has a variety of IT financing options to meet your business need. Contact us today here or call us at 866-970-4637