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9 Ways Manufacturing Companies Can Make the Most of Asset Finance
To stay ahead of the competition in the manufacturing industry requires significant investment. You need to take advantage of the latest technologies and ensure you’re running up-to-date machinery and equipment to maintain smooth operations.
From vehicles used for delivery to CNC machines essential to create precision parts, manufacturing relies on access to the very finest assets. But the strain on capital needed to secure ownership can lead to choked cash flow, reducing business agility and slowing growth.
Asset finance offers an answer to this challenge, presenting a funding solution that reduces the cost of ownership, spreads payments over the asset’s usable lifetime, and adds a support structure to provide maintenance and access to upgrades where needed.
Here are 9 ways that asset finance can help your manufacturing business succeed in a competitive world.
Asset Finance for An Efficient Manufacturing Workflow
Manufacturing is fast-paced and intense, with constant financial and logistical pressures that can make investing in growth and the future seem little more than a far off dream.
The need to modernise and maintain essential production machinery or keep a reliable fleet of vehicles on the road can drain capital to the extent that expansion is simply impossible.
All too often, the cost of replacing expensive specialist equipment is too vast to consider and workflow suffers as staff boldly struggle on with ineffective tools, trying to keep up with the competition in a business desperate for capital investment.
Whether you are a small business creating a niche product to serve a discrete pool of customers, or an international supplier with a diverse output, asset finance provides the agility and flexibility you need to move your company forward.
Our specialist asset finance team at Clifton Private Finance are here to help. With decades of experience helping manufacturing clients, we will create a holistic overview of your business asset needs, and work with you to develop an ongoing strategy for asset management that improves production and releases capital for use in other areas of the business.
9 Ways Manufacturing Companies Can Make the Most of Asset Finance
1. Upgrading Production Machinery
At the core of any manufacturing business is the machinery used to create your products. For many firms, the investment in machinery is considerable, but as technology improves, those machines are typically superseded.
New, more advanced options enter the market and your business can feel left behind as competitors reap the benefits of faster equipment that product more accurate results and have better reporting and analysis functions.
Asset finance is perfectly placed to offer manufacturing companies access to equipment that might otherwise be out of reach, including:
- Leasing for high-end machines that are otherwise prohibitively expensive
- Regular upgrade cycles to ensure business-critical equipment is always at the forefront of technological advances
- Integrated production line models to improve machine-to-machine communication that enhances workflow
- Access to superior reporting tools
- Machines with improved safety systems, benefiting users and lowering business risk
- Energy-efficient equipment that reduces operating costs
Partnering with Clifton Private Finance opens the door to better machinery with cost-effective payment structures. Speak to an advisor right now to move your business forward today.
2. Vehicle Finance
A classic use of asset finance, the options available for vehicle finance are wide and flexible, able to be customised to suit your business’s precise needs.
Manufacturing rarely stops once production is complete - delivery is often a core component to a robust and competitive business model.
Vehicle asset finance can provide you with a fleet of vans or HGVs to get your products to your customers, provide your sales team with cars to reach more potential customers, and even support the production line with forklifts and other specialist vehicles essential for operations.
When you use asset finance for your vehicle needs, you avoid tying up large amounts of capital in a depreciating asset with a significant ownership overhead.
3. Maintenance and Support
Both production machinery and vehicle fleets require regular maintenance, a key overhead that is often ignored when considering purchase.
Maintenance contracts tied to asset finance can remove that administrative burden and evenly spread the cost of keeping equipment in top condition, freeing you to use your assets without concern over their reliability.
Machines that break down are taken for repair and delivered back without delay, minimising downtime as much as possible, while mission critical equipment is temporarily replaced with like-for-like loaned equipment to ensure operations never misses a beat.
The risk of ownership is removed and you are left able to run your business without worry.
4. Meeting Sustainability Goals
As we move onward towards an aim for net zero by 2050, environmental responsibility and sustainability are key considerations for every business - no more so than the manufacturing industry.
Investing in the essential infrastructure that’s needed to move from legacy systems to new green initiatives can be difficult, however, with significant capital required in many cases.
Asset finance can help fund these essential upgrades, spreading the cost of your sustainability obligations so you can properly enjoy the benefits of future proofed operations without exhausting capital resources.
5. Funding Temporary Production and Storage Spaces
Asset finance is not limited to machinery. Specialist lenders exist to provide funding that can help you when the speed of growth outstrips your existing premises.
Temporary pre-fabricated buildings offer a reprieve while new premises can be found and acquired, allowing you to expand operations on your current site to meet demand.
6. Machinery Leasing for Short-Term Projects
Investing in specialist machinery when it is potentially only needed for a single short-term contract can make accepting that contract prohibitive.
Short-term leasing options give you the flexibility to say ‘yes’ to customers with niche requirements, improving your relationships and allowing you to seize opportunities as they arise.
With flexible plans, assets can be returned at the end of the project lifecycle, or retained if a more long-term expansion becomes viable, giving you the power you need to react with ease to the changing demands of your customer base.
7. Investing in AI and Robotics
Smart factories bring the best of modern automation and advances to large-scale manufacturing businesses.
Companies that invest in artificial intelligence (AI) technologies and robotic production machines are able to grow to meet the needs of an international market, expanding without sacrificing reliability or quality control.
Moving operations from labour intensive systems to streamlined smart factories requires substantial investment, making asset finance partners key collaborators in your growth plans.
8. Increasing Capacity for Seasonal Demand
Most manufacturing companies have a production schedule that peaks and troughs with seasonal fluctuations, making asset investment ever harder to manage and justify.
Short-term or seasonal need can force investment in equipment that may be under-utilised during long parts of the year, an inefficient practice with unnecessary financial and logistical overheads.
Asset finance solves seasonal challenges, flexibly providing equipment and machinery only when it is needed, minimising capital expenditure and helping to limit costly shuttering.
9. Refinancing Existing Assets for Capital Needs
Previous investment in valuable machinery is not wasted. Asset-based finance options are available to release equity built up in existing assets, giving you the leverage you need to obtain cost-effective loans and funding solutions for other use.
Assets can be presented as securities to provide capital for expansion, marketing, short-term cash flow needs, debt refinancing and other flexible business needs.
Grow Your Manufacturing Business with Asset Finance
Asset finance provides power to manufacturing companies, lifting the front-loaded weight of capital investment and spreading it smoothly across the working lifetime of the asset. In this way, contracts with more customers can be secured and your growth plans brought to fruition.
Misconceptions regarding asset finance can stifle business. It is common to believe that it’s a funding solution limited to vehicle finance only - but as can be seen, asset finance extends far beyond van leasing.
Specialist asset finance lenders who have experience in the manufacturing industry will offer bespoke packages that meet the more complex needs of manufacturers, providing a breadth of support that gives you flexibility to obtain the vital machinery that will propel your company forward.
With Clifton Private Finance as your financial partner, you can grow your business confidently, obtaining the machinery, infrastructure, and vehicles you need be truly competitive on an international stage.
Asset Finance with Clifton Private Finance
Clifton Private Finance is a specialist whole-of-market business finance broker. We have established relationships with the diverse market of both traditional and independent asset finance lenders, opening the door for you to obtain the low-cost targeted funding you need to boost your manufacturing business.
Contact an adviser today to discuss your individual circumstances. Our team will talk through your requirements and the difficulties you have faced so that we can put together a comprehensive plan for effective funding.
We’ll compare lenders and match you to the ones who are the best fit for your actual needs, considering your business position, financial forecasts, and credit history. With access to the whole marketplace of lenders, we can find a deal that will ensure you get the assets you need. Book a free consultation now.
