Materials handling equipment finance offers tailored financial solutions to help businesses acquire the essential tools needed to efficiently move, store, control, and protect goods within industrial and warehouse environments. By financing this type of equipment, companies can improve operational efficiency, enhance safety, and manage growth without the strain of large upfront costs. Materials handling equipment is essential for many businesses in manufacturing, warehousing, and distribution. Choosing the right financing option depends on the specific needs of the business, the expected lifespan of the equipment, and the company’s financial situation. With the right financing, businesses can ensure they have the necessary equipment to operate efficiently, while managing cash flow and preserving capital for other important investments.
key finance options for Materials Handling Equipment
Rental / Operating Lease
The business rents the equipment for a specific period of time. This is ideal for all types of equipment for businesses as it has a high level of flexibiilty and doesn’t tie up capital in equipment ownership. At the end of term many options are available including ownership.
Finance Lease
The business leases the equipment with the option to purchase it at the end of the lease term. Payments are spread over time, and the equipment is considered an asset on the balance sheet.
Chattel Mortgage
The business pays fixed installments over the term of the agreement. Ownership transfers to the business once all payments are made. This option is suitable for businesses that need long-term use and eventual ownership of the equipment.
Vendor Financing
Some manufacturers or dealers offer in-house financing options via companies like FInance@work. This can streamline the purchase process and might come with benefits like lower interest rates, maintenance packages, or extended warranties.
Line of Credit
A revolving line of credit dedicated to equipment purchases. Businesses can draw on the credit as needed, paying interest only on the amount borrowed, providing flexibility for ongoing equipment needs.
Benefits of Materials Handling Equipment Finance
- Cash Flow Management: Financing spreads the cost of expensive equipment over time, helping to maintain cash flow for other operational needs.
- Tax Advantages: Depending on the financing option and business use payments may be tax-deductible.
- Flexibility: Leasing options provide the flexibility to upgrade to newer models as technology advances, ensuring that the business remains competitive and efficient.
- Preservation of Capital: Financing allows businesses to acquire necessary equipment without depleting their working capital, leaving funds available for other investments or emergencies.
Considerations
- Interest Rates and Fees: Evaluate the total cost of financing, including interest rates, fees, and any potential hidden charges.
- Term Length: Ensure the financing term aligns with the expected lifespan of the equipment and the business’s revenue cycle.
- Maintenance and Repairs: Consider who is responsible for maintaining and repairing the equipment. Some leasing agreements may include maintenance services, which can reduce downtime and costs.
- Residual Value: In leasing agreements, be aware of the equipment’s residual value at the end of the term and any options for purchasing the equipment.
Specialised Financing
- New vs. Used Equipment: Both new and used materials handling equipment can be financed. Used equipment may be more affordable, but financing terms might differ.
- Technology and Automation Upgrades: In industries where technology evolves rapidly, financing options that allow for upgrades to automated systems or the latest technology can be advantageous.
- Seasonal Payment Plans: For businesses with seasonal fluctuations in demand, some lenders offer payment plans that align with cash flow patterns, reducing financial strain during slower periods.
List of Material handling Equipment
Lifting & Access Equipment
- Forklifts (Electric, LPG, Diesel)
- Reach Trucks
- Order Pickers
- Telehandlers
- Boom Lifts
- Scissor Lifts
- Elevated Work Platforms (EWPs)
- Hoists and Winches
Transport & Movement Equipment
- Tow Tractors
- Conveyor Belts (Roller, Belt, Chain-driven)
Storage & Warehouse Systems
- Warehouse Racking Systems (large-scale/custom)
- Mezzanine Floors
- Cantilever Racks
- Vertical Lift Modules (VLMs)
- Mobile Shelving Systems
Automated Handling Systems
- Automated Storage & Retrieval Systems (AS/RS)
- Conveyor Automation Systems
- Robotics for Picking and Sorting
- Automated Guided Vehicles (AGVs)
- Carousel Storage Systems
Loading & Dock Equipment
- Dock Levellers
- Vehicle Restraints
- Loading Ramps
- Lift Tables