Leasing or purchase? Here is the true cost of equipment
In the industrial sector, more and more companies are choosing financing solutions to acquire expensive equipment without tying up liquidity. Leasing and structured credit models are becoming strategic tools for SMEs that want to access advanced technologies while maintaining financial stability.
The hidden weight of the’direct purchase
Purchasing industrial equipment in a’single solution can compromise the liquidity and operational flexibility of companies, limiting other necessary investments.
An industrial 3D printer, a CNC system, or a robotic plant represent significant investments. The cost of the machine is just the’beginning: materials, post-processing, maintenance, training, and software quickly add up.
For an SME, immobilizing capital in a single machine can slow down investments in technical staff, business development, or adaptation of production spaces. The’direct purchase, justifiable on the production side, remains difficult to sustain in a’single cash outflow.
- Hardware: solo una parte dell’investimento totale
- Materials and consumables: significant recurring costs
- Maintenance and training: necessary for continuous operation
- Software and quality control: essential for reliable production
Operating lease: not just a loan
Leasing allows you to spread the cost of the equipment over time, also integrating maintenance and upgrade services into a single monthly fee.
Leasing financing allows you to spread the cost over a defined period. The equipment remains in use while the company generates revenue with that same machine.
This approach does not eliminate the risk of the investment, but makes it more manageable. For companies that want to move from prototyping to small batch production, leasing helps add capacity without tying up liquidity.
Equipal, a British fintech specializing in equipment financing, has raised £16.25 million to support the purchase of production machinery. The company operates with a digital platform integrated with over 75 suppliers in the UK, financing purchases up to £250,000.
Forward flow: the engine of continuous financing
With forward flow, each new contract generates liquidity to finance another, maintaining growth without financial overload for the credit platform.
The forward flow model is a mechanism designed to continuously finance new leasing contracts. Altum Capital provided Equipal with £1.25 million in equity and a £15 million facility based on this model.
The structure is important because a financing platform needs capital available continuously. If the model works, more suppliers offer financing and more contracts need to be covered.
Equipal supported this British additive manufacturing company in financing a £66,000 3D printer. The application was completed in a few hours, with documents signed in minutes. The case shows how industrial 3D printing is treated as a productive asset, not as an experimental purchase.
For the advanced manufacturing sector, the presence of dedicated capital facilitates access to technologies that would otherwise remain out of reach. Equipal reports a default rate of 1.26% and zero credit losses, with 69% of customers returning for additional financing.
TCO and financing: a strategic combination
The total cost of ownership includes often overlooked aspects such as maintenance, materials, and training; financing helps distribute them more manageably over time.
The Total Cost of Ownership (TCO) of an industrial machine goes beyond the purchase price. It includes scheduled maintenance, consumables, software updates, and staff training.
Leasing can become a tool to align the investment with the revenues generated by the machine. This is especially true when the technology is linked to concrete demand: new orders, a specific contract, the need to bring outsourced production back in-house.
| Cost item | Direct purchase | Operating lease |
|---|---|---|
| Initial outlay | Full amount | None or minimal |
| Liquidity impact | Immediate and total | Distributed over time |
| Maintenance | Separate cost | Often included |
| Flexibility | Low | High (upgrades possible) |
A customer may give up on a machine not because they don’t see its usefulness, but because they don’t want to tie up liquidity or increase exposure too much at one time. For service bureaus and manufacturing SMEs, leasing aligns investment with revenue.
Conclusion
Choosing the right financing model allows industrial companies to accelerate innovation without sacrificing financial stability. The spread of industrial 3D printing depends not only on machine performance or material quality, but also on the ability to access those technologies without compromising financial balance.
Evaluate leasing not as an alternative, but as a strategic tool for the industrial development plan. The agreement between Equipal and Altum Capital represents an interesting signal for the advanced manufacturing market and for all companies that look at 3D printing as a production tool.
article written with the help of artificial intelligence systems
Q&A
Why can the direct purchase of industrial equipment be risky for an SME?
Purchasing machinery in a single payment ties up precious liquidity and reduces operational flexibility, preventing other investments in personnel, business development, or production facilities. Furthermore, the price of the machine is only the beginning: materials, maintenance, training, and software add to it.
What are the main hidden costs of industrial equipment beyond the hardware?
Recurring costs include materials and consumables, scheduled maintenance, staff training, and quality control software. These items significantly affect the total cost of ownership and must be considered in the investment evaluation.
What is the forward flow model and why is it important for a financing platform?
Forward flow is a mechanism in which each new leasing contract generates liquidity to finance another, enabling continuous growth without financial overload. It is essential because it ensures continuously available capital to meet the growing demand for new financing.
What does the case of Incremental-AM supported by Equipal demonstrate?
Equipal financed a £66,000 3D printer for Incremental-AM in just a few hours, demonstrating that industrial 3D printing is treated as a productive asset and not as an experimental purchase. This case shows how dedicated capital facilitates access to advanced technologies for manufacturing SMEs.
What advantages does operating leasing offer over direct purchase according to the article?
Leasing requires no or minimal initial outlay and spreads the impact on liquidity over time, often including maintenance and upgrades in a single fee. It also offers greater flexibility with the possibility of upgrades, unlike direct purchase, which locks up capital and limits business responsiveness.
Why is TCO a strategic pairing with financing?
The Total Cost of Ownership includes maintenance, consumables, software, and training, in addition to the machine price. Leasing allows these often-overlooked costs to be spread over time, aligning the investment with the revenues generated and making technological innovation financially sustainable.
