The Benefits of Equipment Financing for Mold Builders and Tech Suppliers
Equipment financing offers mold builders and technology suppliers flexibility and choice, which improves customer relationships.
Last month we featured our annual technology review and sourcing guide, which equipped you with information and resources to ease your future product and equipment purchasing plans. To follow that, I wanted to provide a bit of insight into the benefits of equipment financing. I sought out Toni Larson, the senior vice president of industrial equipment for Key Equipment Finance (toni.larson@key.com; keyequipmentfinance.com), who follows equipment finance trends in the manufacturing sector.
Toni says that “the power of moldmaking technology is in its use, not its ownership, which is why equipment financing can provide mold builders in need of new or upgraded equipment and software with the flexibility and efficiency necessary to stay competitive.” Here are some of the benefits of equipment financing that Toni outlines for both the mold builder and technology supplier:
Mold builders not only gain flexibility with equipment financing, but they conserve working capital and lines of credit for other business investments. The lender may make any progress payments that the technology supplier requires on behalf of the customer. Also, payments can be structured to match budget requirements, with terms that are in alignment with the equipment’s useful life.
Equipment financing provides obsolescence protection with the ability to add or upgrade equipment and software during the term. And, by bundling acquired equipment with soft costs, such as installation, sales tax, freight and maintenance into one agreement, mold builders can acquire what they need with no money down and one fixed monthly payment.
Equipment financing may also provide tax advantages by using depreciation and section 179 credit to reduce tax liability. A lease allows 100 percent of the payment to be expensed. Lastly, fixed payments throughout the term enable predictable cash flow management.
Technology suppliers can increase sales. By teaming with an equipment finance partner, technology suppliers can implement financing programs with their customers’ budgets in mind. They can provide a total solution that bundles all equipment and related service and installation costs.
Technology suppliers can also shorten sales cycles. By introducing fixed, monthly payments early, they assure mold builders they can afford the solution that best meets their needs. Also, because no down payment is required, mold builders only pay for what they use when they use it.
Equipment financing also increases transaction sizes because it eases mold builders through the buying process of product suites and bundled solutions. It also offers reduced discounting, which minimizes pricing concerns through fixed monthly payments that are spread out over time.
All this greater flexibility and choice improves customer relationships.
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