Finance for the Printing Industry

However, digital technology is bringing a revolution to the print industry. Print on demand and print as a service is offering the ability to make short-run and personalised print cost-effective, while new techniques, from laser and thermal print to radiation or energy curing, are bringing a revolution in speed and quality.

Of course, there are new challenges as well as new options. Many companies can now do simple design and print jobs such as stationery in-house. It has meant some printers have less work to do. But print has always been a highly competitive industry.

Success can depend on having the right funding - and in recent years many lenders have proved reluctant to lend to the sector, citing historical problems dating back to the financial crisis. Fortunately, at Rangewell, we know the lenders who are able to look at the future rather than the past.

Your funding options

You may need to find the right type of funding option to allow you to:

• Set up a print business
• Buy into an existing print business
• Acquire equipment and assets
• Acquire premises
• Provide working capital
• Finance growth
• Deal with tax

Set up a print business

New printing businesses tend to specialise in specific areas. Setting up any printing business requires skills and experience, and you will probably want to work in an area where your own knowledge will be a valuable business advantage.

A sound business plan is essential. If you are considering setting up your own print business you will probably already have clients lined up, and some idea of the income you may be able to generate from them.

However, it is all too easy to underestimate the costs that are involved in setting up for yourself. You’ll need to think about how you will structure your business. It may be possible to run a small print operation as a one-person operation but, in most cases, you will need to assemble a small team, and a limited company or a partnership may be a foundation for the future. The costs involved for incorporation are minimal, but however you structure your business, there will be some unavoidable costs to deal with. You will need a website, premises, equipment and working capital.

Securing funding for setting up a new business can be a challenge. At Rangewell we can help you find the financial solutions you need.

Buying an existing printing business

Buying an existing print business could offer an established revenue stream. The value of the business may depend on the sector the business works in, the equipment it has, the contracts it has secured and the turnover it offers, but as with any profitable business, the costs may be high.

There are a number of ways to raise the necessary funding. A Secured loan could be one answer, while another is ‘Jigsaw’ funding. This is a bespoke finance package made up of a number of loan types, such as a Commercial Mortgage for the premises, with other lending to cover goodwill.

Find out more about funding for buy-ins and buyouts.

Acquiring equipment and assets

The type of print you plan on providing will dictate the equipment you need. Basic print technology can be divided into inkjet, laser, screen and offset. If you are printing business cards, it may be better to select a laser printer while an offset press will lower your costs if you are printing a large volume of high-quality documents. A screen printer is necessary if you plan on printing to fabric, such as t-shirts.

If you also intend to design print items for clients, you will need design software and a suitable computer. Your options can range from simple desktop publishing systems to high-end design programs for graphics.

You will need finishing equipment. Even if you are only printing business cards, you will need a cutter. The more complicated the services you offer, the more sophisticated - and costly - your equipment needs will be.

Putting high-cost equipment in reach

The equipment you need will depend on your plans. While a basic inkjet capable of a wide range of short run tasks can cost just a few thousand pounds, a very large offset printer and ancillaries could cost millions. Fortunately, whatever stage your print business has reached, Asset Finance -  Hire Purchase and Leasing - can help make virtually any type of equipment you need affordable.

There are several types of Asset Funding:

Hire Purchase

Hire Purchase lets you spread the cost of buying the equipment you will use for the long term, such as office furniture. Arrangements generally last between 12 and 72 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours. Smaller items, such as basic guillotines and benches may be suitable for hire purchase.

Equipment suppliers will often offer HP arrangements to help them close a deal. These can sound very attractive, and can even include 0% finance options. While these 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

Finance and Operating Leases work like rental agreements and let you spread the cost of equipment with no upfront payment. This type of finance could be the best option for very high-cost equipment which may have a limited life. There can be no upfront cost - you can pay for your equipment from the income it generates each month.

This means that with a lease you can have the print equipment you need, and simply return it to the finance house at the end of the lease. This may be particularly appropriate for your print operation, as it makes it simpler to adopt the latest technology - helping your business maintain a competitive edge.

New and used assets

Pre-owned equipment can mean major savings compared with new equipment. We can help you arrange various types of Asset Finance for used equipment, allowing you to save twice - with both a reduced purchase price and, secondly, by spreading the cost of finance.

Refinance existing assets

The equipment that your business already uses represents a considerable investment. Asset Refinance lets you reuse that investment to fund any aspect of your business, while still having full use of your assets. The finance company will buy the asset from you, providing you with a cash sum. You then buy the asset back, with a new finance arrangement.

You can use Asset Refinance to release cash, or to replace existing finance deals to reduce your monthly outgoings. 

Find out more about Asset Finance, and how it can put the equipment you need in reach.

Funding for premises

Your business will need premises. An office will be essential, and you may also need a design studio and storage space as well as ample space for your print production machinery.

Leasing a suitable industrial unit can provide the simplest option. We can provide solutions if you want to lease your premises.

However, once established, your business might be able to buy suitable premises with a Commercial Mortgage, decreasing your monthly outgoings, and providing your business with a valuable asset for the future

Remember, if you already own your premises, a Commercial Mortgage might be a cost-effective way to raise funds to use elsewhere in your business.

Find out more about a Commercial Mortgage.

Getting our help to find the funding that’s right for your print business

At Rangewell, we can help you find the most appropriate finance for any business need:

Basic business loans

There are two types of basic business lending, which can be used for any business purpose. Unsecured business loans can be suitable for smaller sums 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 of money, of £250,000 or more.

Providing working capital

All print businesses are vulnerable to cashflow challenges. Maintaining cashflow when customers are slow to pay is essential simply to stay in business.

We can provide a number of solutions.

Revolving Credit Facilities

Overdrafts are a flexible form of business finance that allows you to call on funds as you need them. Banks may be reluctant to provide overdraft facilities  - but Revolving Credit Facilities can provide an alternative, providing a line of credit from a lender, with an agreed limit that you can call on when you need it. You only pay for the money you take out.

Working Capital Finance

Working Capital Finance can help you stay afloat and pay staff and suppliers during the early stages of your business. It is designed to cover your operating expenses, from staff costs to supplier bills, when cashflow is slow. It is usually designed to be repaid in the short- to medium-term, once your business is fully on its feet.

Invoice Finance

Cashflow is a challenge in the print industry. Clients often expect 90-day payment terms, whilst paper suppliers demand quick payment. This makes the cashflow gap you need to fund even wider.

Invoice Factoring and Discounting can provide the solution, bringing you cash virtually as soon as a print job is finished and an invoice issued. It means your cashflow automatically keeps pace with the level of work you are doing.

• Get 90% of invoice value as soon as you bill your customers
• Cleared funds can be in your account the day after you invoice
• You can retain control over your credit control – your customers need not know you are using the facility
• The level of funding you can call on will grow in relation to your level of outstanding invoices – making it ideal for funding growth
• Injects capital into your business, without borrowing or sacrificing equity

Growth Finance

As a print business, you may have ambitious growth plans. Buying in new machinery and increasing your capacity can be the first step to increasing your sales turnover. This expansion will almost certainly require finance.

But most lenders will only base their lending on your past performance. Growth Finance can help, and is a special type of lending designed to finance growth.  While most forms of lending are based on your trading history and record of profits, but it may be possible to arrange Growth Finance based on your profit projections.

Get our help finding the most appropriate lending for your needs. 

Tax Loans

Large quarterly VAT and annual tax demands are inevitable in the print industry, and can disrupt  your cashflow. Tax loans help you to spread the cost of your tax demands into affordable monthly payments.

• Better control of cashflow
• Fixed monthly payments
• Helps avoid penalty charges

Find out how a Tax Loan could help you smooth your cashflow.

Mezzanine Funding for print businesses

If you want to buy an existing business, or acquire a very large piece of capital machinery, many lenders will simply not be able to lend you sufficient funds.

Equity funding from an investor could provide the scale of funding you need. There’s nothing to repay, because you are basically selling a share in your business. However, it could mean losing control of your company – it will certainly mean sharing all future profits with your investors. Equity investors make their return from your growth.

Mezzanine Finance can provide a third way to raise the funds you need. A lender will provide the funds you need, secured on the future of your business. 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.

How we help you capitalise your print business

At Rangewell, we work with a wide range of printers, from small high-street operations to major volume printworks.

It has helped us build up expert knowledge of the financial needs of the industry.

We can put that expertise to work to help you find the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.

As well as conventional finance 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 products, we can work with you to find the answers that are right for your business.