Cost

Separate Cost from Price. Choice of funding can have an important impact on the cost.

Take advantage of special manufacturer offers that offer preferential funding terms, e.g. deferred payments, etc.

The interest rate is the price of money. More important is the cost, ie how much you pay and when. Matching payment to use means, spreading the cost over whatever period of use is realistic to ensure the payments are affordable.

Capital Budgeting

Fix the payments in advance using term finance. This allows you to budget accurately and confidently for new machinery.

Consider all the financing options, for example, operating lease or different payment structures and ancillary options, e.g., mechanical breakdown insurance.

Cash Flow

Spread payments over the working life of the machine. Ask yourself if there is anything to be gained by paying in full, in advance. Will the machine work any harder? Probably not! So why put additional pressure on cash flow?

Match payment to cash flow. It makes sense to pay from income not overdraft. Where necessary, Finance for Industry will vary the size and timing of payments, to fit in with specific contract income.