Vendor Financing Programs: Why There’s No Better Time Than Now

Vendor Partner Program is your Road to Success
Vendor Partner Program is your Road to Success

Vendor Financing Programs: Why There’s No Better Time Than Now

Vendor financing is an important marketing and sales tool available to equipment manufacturers, dealers, and distributors. Even when the economy was doing well, a significant number of equipment buyers were opting for purchases financed by the equipment vendor.

Now that the economy has been in an economic slowdown and cash liquidity is a major area of concern for most companies, equipment & software financing is in greater demand. This is especially true for small and medium-sized organizations that need the equipment or software now, but don’t have enough in cash reserves to fund the entire purchase upfront.

From a vendor’s perspective, the ability to finance a purchase is an important one, especially if their competitors can and they can’t.


Because businesses that are unable to make a purchase outright would have no choice but to go elsewhere to a vendor who can work with their current financial situation.

The issue is that for many small or medium-sized vendors, they simply don’t have the financial resources to compete with large manufacturers/vendors with captive financing capabilities and successful vendor financing programs of their own.

Vendor Financing Programs Are a Win-Win

For equipment buyers, a vendor financing program gives them the flexibility to make installment payments (typically on a monthly basis), so they don’t deplete their working capital. Often times, there’s also the option of leasing, if need be, against an outright purchase of the equipment.

For the vendor, equipment financing enables a long-term relationship building exercise with the customer, leading to an increase in customer loyalty, repeat purchases, cross-selling, and technology enhancements as and when required. This translates into more business and additional revenue.

Selecting the Right Vendor Finance Partner

While the need for vendor financing can’t be underestimated, the real challenge for many vendors lies in their ability to set up an equipment or software financing program on their own. Most small and medium-sized vendors simply don’t have the requisite finance – or infrastructure – to manage and run a financing program on their own. They also lack the knowledge and experience. As such, finding a suitable finance partner is paramount to success.

A good finance partner will have access to capital, as well as the requisite expertise to successfully manage an equipment and software financing program. In addition, the selected partner should have a proven track record of vendor financing in the specific industry in which the vendor is operating, as industry-specific knowledge and experience is critical to the successful implementation of such vendor financing programs. The financing partner should also have a large capital base to be able to provide long-term solutions and stability to relationships both with the vendors and their end customers.

Once a vendor has selected a financing partner, the end-goal should be to build a long-term and sustainable relationship with a single financing partner instead of exploring multiple different options.

Get Assistance with Setting Up a Vendor Finance Program

To have a more detailed discussion on this subject and understand all the benefits of setting up a vendor financing program for your customers, contact us today at 800-755-0585.

Top 5 Benefits of Financing your Industrial Automation Upgrade

Benefits of Financing Industrial Automation Upgrades
Benefits of Financing Industrial Automation Upgrades

Top 5 Benefits of Financing your Industrial Automation Upgrade

Industrial Automation is the future and incorporating it into your manufacturing workflow is an absolute necessity in today’s business climate. While the evolution of robots and specifically calibrated machinery has changed our production processes and methodologies for the better, it comes at a significant monetary cost.

The most difficult part of adopting and benefiting from industrial automation is getting hold of the machinery itself. There are a myriad of financing options available for you to choose from and an even wider range of vendors offering their services. Trying to make the best decision for your company and your finances can become difficult for this very reason.

You can go to a bank and ask them to finance your upgrades, but your credit score and history will play a huge role in this acquisition. Smaller businesses in particular might find banks reluctant to invest in this steep upfront cost for them, which is where private financing companies like Dimension Funding come in.

Most of the time, in situations like this, financing your industrial automation upgrades will be your best bet – regardless of the size of your business or the equipment you’re looking to have installed. 

Here are 4 reasons why. 

1. Only Purchased Industrial Automation Equipment Is Used as Collateral

A problem with financing through bank loans is that the bank lending the money will require a “blanket UCC lien.” This allows the bank to take all the assets of your company as a security for the financed equipment. It grants them the legal right to seize these assets in the event of nonpayment. Banks do this as an extra peace of mind to ensure you pay up, but it lessens your position and is undeniably a big liability.

Private financing companies on the other hand do not require a “blanket lien.” In fact, many only require the equipment being financed to be used as a security instead of everything you own. This keeps you in control and minimizes huge losses in case of non-payment.

2. All Industrial Automation Upgrade Expenses Are Taken into Account

Another problem with financing your industrial automation upgrade through banks is the fact that they don’t cover soft costs like installing the equipment, transporting the equipment, and maintaining it in the long run. These are all expenses that you are expected to pay on your own and can come as an unpleasant surprise after already agreeing to pay a large sum of money for the equipment itself.

If you finance your upgrades privately, however, all these expenses are accounted for and included in your principal amount. This minimizes any sudden or unexpected costs and gives you the full picture of what you’re actually paying for. Better awareness of what you pay allows you to plan better and allocate those funds for more important things in your business.

3. Fixed Monthly Payments

Private financing companies like Dimension Funding offer yet another advantage when compared to conventional bank loans. Banks usually prefer to loan money on a floating or a variable rate of interest which results in irregular monthly payments. Besides the inconvenience of having to constantly stay updated with these payments, it makes it more difficult to plan and allocate financial resources efficiently.

Privately financing your company’s industrial automation through a third-party company means that you will pay a fixed monthly payment for the entire duration of the automation equipment’s decided term. There are no unpleasant changes in interest rates and no hindrances in planning for where to invest more resources in the future. This allows you to treat your payments like a consistent monthly cost. One that is easy to account and plan for.

4. Easy Application and Approval Process

The process of applying for and getting approved for private financing is more streamlined than it has ever been.

You can apply for up to $250k without providing financial statements (some restrictions apply) and if you require a larger package, a hassle-free paperwork process makes that easy too. The application is online and after you apply, the approval process can take as little as a few short hours. It’s that easy! Compare this with the mountain of paperwork required for bank loans and the associated uncertainty and lack of transparency. Private financing is a clear winner.

Next Steps

Financial decisions like deciding to incorporate industrial automation into your production flow have the potential of either taking your business to the next level or crippling your work and efforts. Making the most beneficial choice of how and where to receive this financing is a multi-faceted problem that requires you to look at your individual needs, your budgets, and what you value as a company.

If you’re interested in learning more about financing your company’s equipment through a third-party vendor for all the reasons we’ve outlined and more, be sure to contact Dimension Funding to get a head start on your approval process.