Top 5 Benefits of Financing your Industrial Automation Upgrade
- December 10, 2020
- 12:37 pm
- Equipment, Industrial Automation
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.