Finance for Electrical Engineering Equipment
Find the funds you need to purchase the next generation of electrical equipmentSpeak to one of our experts020 4525 5312
- Spread costs over 6-60 months
- Rates from 6%
- We can often undercut ’0%’ deals from equipment suppliers
- Balloon payment options - reduce monthly outgoings
- No capital requirement
- Acquire any type of equipment
- Asset refinance available
- No upfront costs
- Mezzanine finance
- Raising funds with a commercial mortgage
- Secured lending
- Equity funding
Businesses that produce and design electrical and electronic equipment are under increasing pressures.
Competition is high, and the demand for reduced environmental impact throughout your product’s lifecycle is growing.
With the right financial arrangements, those pressures can help you build a more profitable business.
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There are many new challenges for the electrical engineering and manufacturing sector. Eco-design means you will have to comply with legal requirements such as the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations, the Waste Electrical and Electronic Equipment Regulations and the European Union Energy-related Products Directive.
Increased pressure from customers, legislators and the supply chain for products that have less impact on the environment is another.
Hazardous materials will have to be engineered out. New production processes - and costly new equipment - may become essential. You may need to re-equip your entire production operation. But if you can find the necessary finance, it could let you build a business producing better products, with reduced costs and clear marketing advantage.
At Rangewell, we know the challenges you and your Electrical Equipment production operation faces - and we know the financial solutions that can help you solve them, and build a better, leaner, more ecological and more profitable business.
However, this can help you to cut costs, innovate and gain a marketing advantage.
Your funding options
The costs start with product development but will escalate as you move into the production phase. You will need to have every production asset - from winders and jigs to conveyors and handling equipment - in place before production can begin. You may be able to set up a basic assembly-based manufacturing business with basic tools, but a fully automated volume line will cost several million pounds.
Only the largest electrical engineering operations have the cash reserves to equip a full production operation outright.
Fortunately, there is a range of funding options that can help you finance the equipment you need:
Asset Finance is a blanket term for Hire Purchase and Leasing. when you want to finance new assets, these solutions can help you acquire virtually any type of production equipment.
Hire Purchase – buying your production equipment
Hire Purchase offers a straightforward way to spread the cost of equipping your production operation ver up to five years. You will need to put down a deposit, typically between 5%-25% of the total price, and repay the remainder, together with the interest, over an agreed period of up to 60 months. You pay a fixed rate of interest and agreed monthly payments, making budgeting simple. Lower cost items and basic tools such as pillar drills may be suitable for hire purchase
You may also have the option to structure your payments to fit your projected cash flow. For example, you can secure lower monthly repayments by agreeing to pay a final lump sum, known as a balloon payment, at the end of the loan period. This will mean that your equipment has had sufficient time to generate the funds to pay for itself when your production is fully operational.
Pay less than with suppliers' finance
Equipment manufacturers and dealers will often offer HP arrangements. These can sound very attractive, and can even include 0% options. While these can look attractive, at Rangewell we have found that there can actually be hidden costs. You may be able to save money by arranging finance yourself.
See how we can help you beat 0% finance deals.
Leases – avoiding capital costs
With a lease, your production equipment is rented to you by the finance company, and you effectively hire it for the period of the agreement. It remains their property, avoiding the need for capital expenditure. You may also be able to choose a lease that gives maintenance and repair responsibilities back to the finance company.
Monthly payments and interest rates are fixed for the duration of the contract, and you can pay for your equipment from the income it generates each month.
When production equipment becomes obsolete because new technology is available or your production process changes, you can simply return it to the finance house at the end of the lease. This makes it simpler to adopt the latest technology - helping your business maintain a competitive edge.
An Asset Refinance agreement can let you release the investment you have already made in existing equipment, and re-use the funds elsewhere in your business.
It works by letting you sell existing assets to a finance company, who will provide you with a cash payment which you can use as you wish. You will then make monthly repayments to buy them back.
You can continue to use the equipment while you are repaying. You can also use Asset Refinance to replace an existing funding agreement - allowing you to reduce monthly outgoings.
Find out more about Asset Refinance.
To acquire a complete factory or fund a new volume production line, you may need a scale of funding that many lenders will simply not be able to provide.
Equity funding could be one way to provide the scale of funding required. There are no repayments to make, because you are selling a share in your business. However, it will mean sharing all future profits with your investors, and could mean losing control of your business. Mezzanine Finance can provide a solution. A lender will provide the funds you need, secured on the future of your business.
This means that they will offer a high level of funding, but you will need to repay their debt and interest charges - if you fail to repay, they will have the right to take an agreed proportion of equity interest in the company.
Find out more about how Mezzanine Finance can offer a high level of funding.
You may also be able to simply borrow funding for individual machines. Lending can provide a cost-effective solution in some circumstances - talking to a Rangewell expert will help you understand what they are.
There are two types of basic business lending, which can be used for any business purpose and can provide a simple way to funding for all types of business expenses. Unsecured business loans can be suitable for smaller items and usually allow you up to 5 years to repay.
Secured loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home or your business premises. They can be used to borrow large sums, and payback can be arranged over 10 years or more. Because security reduces the risk for lenders, interest rates tend to be significantly lower than unsecured lending.
Using a Commercial Mortgage to raise funds
If you own your factory or other business premises you may be able to use them to raise the funding you need for a production facility. By taking out a Commercial Mortgage on the property, you can raise a large sum which you can use for any business purpose. Repayments can be over 20 years or more.
Find out more about raising funds with a Commercial Mortgage.
How we help you capitalise electrical manufacturing
At Rangewell, we work across the entire lending industry, and our finance experts have personal experience of different business sectors. Our experience across the manufacturing industry works for you. Our team knows the lenders who specialise in finance for production machinery, and those who understand the electrical engineering business sector. It means that we can help you find the most competitive rates for all types of finance solutions.
We put this knowledge to work for you, finding the most competitive deals for the equipment you need, from a single machine to a complete line.
As well as conventional construction funding products, we can help you find Alternative Funding, using new loan providers and styles of funding. We know the lenders who can offer the most competitive rates for the sector. Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of lending types, we have the answers you need.
Simply call us now to find out more.
REAL EXAMPLES OF WHAT WE CAN DO
Find finance to allow a manufacturer to set up a robotic production line
Source lease agreements for machinery from various suppliers to assemble a production line
Set up HP for an ultrasonic cleaner - with VAT deferred - for a company in a Creditors Voluntary Agreement
Find the most competitive funding arrangement to set up a chip making facility
Find funding for handling equipment that undercuts the 0% deals offered by dealers
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Tailored to your businessWe can help set up jigsaw funding to fit your business. Asset finance and other types of lending can be tailored for different funding needs.
Spread the cost of equipmentEquipment costs can be spread over months or years. You may not even need a deposit with some types of Asset Finance.
Work with the latest technologyWith the right funding in place, you can always work with the latest machines and use the latest processes.
Leasing reduces ongoing costsLeasing can avoid the maintenance costs associated with large machinery.
Avoid depreciation costsWith a lease you avoid depreciation. You don’t own equipment that is falling in value.
Low fixed monthly paymentsYou need to keep your monthly outgoings under control. We can help you match payments to your budget.
Download Rangewell’s free and detailed guide to Finance for Electrical Equipment
How you can work with equipment you can’t afford to buy
What are the types of finance - which is right for you?
How to find the right provider - why they are not all the same
Are there downsides to finance?
How to arrange Asset Finance
What paperwork do you need?
Key terms explained