MANUFACTURERS ARE under pressure to invest in more efficient, productive and resilient plant and equipment – whether installing automation systems or replacing ageing machinery – but high capital costs can make investment decisions difficult.

For equipment suppliers and OEMs, that creates a challenge. Even when the business case for new equipment is strong, manufacturing firms may think twice if the purchase places too much pressure on cash flow.

Finance can help bridge that gap. Yet it is often introduced only after equipment has been specified, priced and selected. Bringing finance into the sales conversation earlier can make investment easier for customers while helping suppliers support stronger, more confident buying decisions.

Discussing finance at point of sale

So what holds businesses back from offering finance at the point of sale? For many executives and sales teams, finance can feel unfamiliar. However, introducing finance does not mean turning salespeople into finance specialists. It means helping them recognise where finance could support the customer’s decision and when to bring in a finance partner.

Customers do not always ask about finance, even when they use it regularly. In reality, they often arrange it later. In many cases, buying happens in two stages: the operational team selects the equipment, then a finance director or financial controller decides how it will be funded. That may be through a loan, hire purchase or retrospective finance (for example, sale and lease back). If finance is only discussed at that second stage, the supplier may miss the opportunity to shape the full value proposition.

Understanding the commercial case

There is also a clear commercial case. Making finance part of the sales process can deliver measurable results. Siemens Financial Services interviewed over 50 international vendor partners and found that, on average, vendors achieve a 20% increase in sales and a 24% uplift in profit after adding integrated smart finance to their offering.

The reason is simple. Finance breaks a large upfront cost into more manageable payments that better match a customer's cash flow. However, the benefits don't end with one sale. Customers that have successfully used asset finance are more likely to use it again as they grow. This can support longer-term relationships between suppliers and customers, opening future conversations around service contracts, warranties, renewals and upgrades.

Helping customers invest through integrated finance

Finance can be structured around the asset, whether new, used or retrofitted, and aligned with the customer's cash flow. CDE Group's partnership with Siemens Financial Services in the UK illustrates this in practice.

"To open up a wet processing recycling facility involves sizeable capital expenditure. For our private entrepreneurial customer profile, access to finance and speed to market are key to growing their business," said William Melanophy, CDE Group’s head of business development – UK and Ireland.  "So, although a wet processing plant is typically a large investment for them, when it's up and running, it completely transforms their business model, and their rate of success."

Melanophy noted that one of the biggest barriers facing private companies was being able to raise the money and get the finance in place to allow them to make such investments. "That’s precisely where we've had such good success collaborating with Siemens Financial Services," he continued. "The strength of CDE’s reputation in the market and our successful delivery of these solutions over decades, has allowed Siemens to confidently put financing structures in place."

No repayments until plant is up and running

"These financing arrangements mean minimal upfront payment from the customer. SFS has also managed to tailor arrangements so that the repayments don't start on the equipment until the plant is operational. So, from a customer perspective, that's great. They're not making repayments until the equipment is generating revenue," he concluded. 

For equipment suppliers and OEMs, finance should not replace the technical sales conversation. But when finance is introduced at the right stage, it can help customers assess affordability alongside performance and long-term value. In a market where investment decisions are under pressure, specialist, integrated finance can make the difference between interest and commitment.

John Bolton is sales manager – industry finance at Siemens Financial Services UK

For more information:

www.siemens.com

Tel: 01753 980078