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Manufacturers across all industries are feeling pressure to enhance their efficiency, reduce operating costs, and become more competitive in a saturated market. Luckily, automation can help address these demands.
Recent advances in machine learning technology, robotics, and AI-powered platforms have made these types of automation more affordable. Of course, implementing automation solutions in your factory or manufacturing business does require some initial capital.
If cost is a barrier to adding solutions like AI-powered systems or robotics, there are plenty of ways to secure additional funding.
Here are a few of the best financing options for automation upgrades.
Leasing
If your manufacturing business isn't looking to spend any capital upfront, then leasing may be one of the quickest options to make automation upgrades at your factories. Many companies allow businesses to lease automation upgrades over time instead of purchasing them outright.
There are some benefits to this. By spreading out the cost of automation upgrades over time, you can begin benefitting from them sooner. Because advancements in AI or robotics can happen quickly, this option also gives your business more flexibility to upgrade without being tied to outdated equipment.
Leasing does come with its own set of downsides, however. For one, you don't actually own the assets unless you have a specific lease-to-own agreement. Leasing is also generally more expensive in the long term.
Pros:
- Preserves capital
- Lower risk
- Flexibility on upgrades
- Potential tax benefits
Cons:
- More expensive than purchasing
- May not own the equipment after the lease is up
- Less flexibility on equipment maintenance
Online Funding Companies
Another way to make automation upgrades at your manufacturing facility or business is to obtain specialized funding through a financing company. These platforms often offer quick access to business funding with fewer requirements than other options on this list.
Generally, online funding companies that provide manufacturing financing make the process as easy as possible. With streamlined application portals and other business-friendly policies, you can likely secure funding through an online financing company right from the comfort of your office.
It's important that you only work with reputable and trustworthy financing companies, such as ForaFinancial.com. Additionally, it's recommended that any business assess interest rates, total cost of borrowing, and other metrics before deciding on a funding agreement.
Pros:
- Quickest, most convenient option
- Low barrier to entry
- Flexible financing terms and options
- Transparency and competitive rates
Cons:
- Interest can add to overall costs
- Missed payments could affect credit score
- Important to pick a trustworthy vendor
Government Grants
Government grants are another top option when looking for funding for automation upgrades. Although they do take a bit of legwork, grants are worth looking into for most businesses.
There are various federal, state, and local government offices that provide grants to companies operating in their jurisdiction. Oftentimes, these grants are given specifically to companies to enhance efficiency, boost a company's competitiveness, and offset carbon emissions through more sustainable manufacturing.
Of course, the downsides are that grants often have long and tedious application processes, as well as stringent requirements for approval. If your business is eligible for a government grant, then it's worth pursuing. However, just take the time and bandwidth commitments into account before proceeding.
Pros:
- No need to pay grants back
- Encourages business innovation
- Lots of grant options to choose from
- Can help make your business more sustainable
Cons:
- Time-consuming to apply
- Stringent eligibility and application requirements
- Often highly competitive
- Flexible financing options for your automation upgrades
The future of automation is here now. It's important for any type of factory or manufacturer to keep pace with the advancements in technology. More than that, businesses can stand to benefit from the efficiency, reduction in waste, and other boons of making significant automation upgrades.
There are many ways to secure funding for automation upgrades at your manufacturing business. Not all options are created equally, which is why we focused on the three most realistic and convenient options for manufacturing companies of all different sizes.
Whether you choose online funding companies, leasing agreements, or a government grant, the result is the same — new tools and platforms to help make your business the best it can be.