Research with machine tool OEMs carried out by Siemens Financial Services has revealed they see asset finance and leasing solutions as an increasingly important means for equipment acquisition among customers.
Siemens Financial Services (SFS) surveyed 80 machine tool OEMs during this piece of research which was conducted in the summer of 2013.
The responses of OEMs were relevant to their sales across ten countries in Europe and America, including the UK.
Eighty four per cent of respondents said their customers were experiencing increased difficulty in accessing traditional bank loans to fund equipment acquisition, while more than 60% observed rising demand for non-bank financing options from their customers over the past two years.
Looking at the past two years, 64% of participating machine tool OEMs said that asset finance solutions had been “highly important” in clinching equipment sales in the UK.
Sixty eight per cent of respondents said they expected demand for asset finance to continue to rise out to 2020.
Leasing, specifically, has been highlighted by 55% of the OEM respondents as the principal funding source utilised by machine tools users.
According to SFS, many UK machine tool users are SMEs who have found it increasingly difficult to access the finance they need to invest in replacing and upgrading their equipment since the Global Financial Crisis in 2008 and the subsequent recession.
Their inability to invest caused a significant slump in the machine tools market in 2012 and is hampering UK industrial competitiveness says SFS.
Commenting on his organisation’s new research findings Brian Foster, head of industry at SFS said: “The recession has seen many machine tool users ‘sweating’ their outdated equipment assets because of a lack of funding for new investments
“However, they need to upgrade to more productive, more energy-efficient alternatives if they are to remain competitive in the long run.”
Mr Foster said the OEMs who were able to help customers overcome their financial bottleneck by providing an integrated asset financing or leasing facility would secure themselves a distinct competitive advantage. He therefore urged them to consider offering more lease and rental options for customers.
SFS assured that tailored asset financing arrangements could be flexed by the finance provider to meet the specific business needs of each customer. Regular (monthly or quarterly) lease payments could be arranged in relation to the expected benefits-over-time gained from an upgraded and extended machine tool system.
These benefits could range from improved productivity, access to new markets to multi-tasking and operating cost savings from energy efficiency.