Benefits of leasing your manufacturing equipment

By: Mike McInerney, Regional Sales Manager in Ontario

Equipment is the backbone of your business.

But is it working as hard for your bottom line as it could be? You incur the significant financial investment for manufacturing equipment because without it your business can’t run. You’re faced with a double-edged sword: your equipment increases efficiency and generates revenue, but it drains your cash reserves and income in the short run.

With leasing, you’ll blunt the income-slicing edge of that sword while you reap the benefits of upgraded manufacturing equipment.

Benefits of leasing your manufacturing equipment

Preserve your cash flow

Imagine a town relies on a reservoir to supply its water. Regular consumption of water drains the reservoir, but rain water eventually replenishes it. What would happen if the town consumed all of its water and a drought hit? In your case, what would happen if your business spent all its cash reserves purchasing equipment and business slowed? Or what if opportunity came knocking and you had no liquidity to pursue it?

Manufacturing equipment leasing preserves your business’s cash flow for those unexpected opportunities or emergencies. You’ll structure your payments so you’re paying only when your equipment generates revenue, whether that’s monthly, semi-annually, seasonally or annually. Financing is a means to ensure your business’s reservoir is always full.

Become more nimble

Technology improves at a quickening pace, and the emerging trends in manufacturing breed regular efficiency improvements; just look at the progress of additive manufacturing equipment over the last decade. Leasing your manufacturing equipment keeps you nimble. While a purchase means you’re stuck with your equipment for years as it depreciates, financing provides an opportunity to regularly trade-up your equipment thanks to its high resale value. Imagine the efficiency improvements possible as you regularly trade-up your 3D printer every few years to keep pace with technological advancements.

Lease most equipment, big or small

Leasing provides the same benefits for a larger business as it does for a small business, but there’s one primary difference: the equipment demands for a larger company are greater. Where a small business will need one or two pieces of equipment, a larger company may need an entire assembly line of automated machinery. Leasing’s flexibility means your business can structure financing for a single piece of equipment or get more complex with equipment acquisitions worth millions of dollars.

Finance customized manufacturing equipment

Some companies may need customized equipment for their unique needs. You can generally finance most types of assets, even specialized equipment that may fall outside of regular equipment classes.

Leasing: it’s smart business

With the flexibility to structure financing for one piece of equipment or a whole factory’s worth, leasing will keep your business’s cash reserves secure for any opportunity. Regular trade-ups keep your company with the latest manufacturing technology, even when you need customized equipment. Leasing your manufacturing equipment sharpens your company’s efficiencies and maximizes profit. That’s why it’s smart business.