New research from the Financial Services unit of Siemens (SFS) has revealed the increasing importance of asset finance for investment in the machine tools industry. A survey was conducted amongst the global top 80 machine tools original equipment manufacturers (OEMs) between July and August 2013. All the manufacturers were questioned on their views in relation to the importance, demand and future trends of equipment sales finance. The companies had sales across the ten countries that are the subject of the study. These include China, France, Germany, India, Poland, Russia, Spain, the UK, the US and Turkey.

According to the survey, 84% reported that their customers are experiencing increased difficulty in accessing traditional bank loans to fund equipment acquisition. More than 60% of the manufacturers had seen rising demand for financing options from their customers over the last two years. Furthermore, the results showed that non-bank finance is becoming increasingly relevant in facilitating equipment sales and technology upgrades. 64% of the manufacturers reported that asset finance has been very important in enabling their customers to acquire equipment in the two previous years. Demand for asset financing techniques is expected to grow, with 68% of the OEMs suggesting that asset finance will continue to be important in the next five years. Around 55% of the OEMS said that the principal funding source utilised by machine tools users was leasing.

In the UK, machine tools consumption dropped in 2012, compared to 2007, due to the economic crisis. Access to affordable finance now plays a crucial role in reviving up-to-date machine tools equipment investment, in order to respond to increased demand. As many machine tools users are small and medium-sized enterprises (SMEs), this is especially important.

"The recession has seen many machine tool users ‘sweating’ their outdated equipment assets because of a lack of funding for new investments,” commented Brian Foster, Head of Industry at SFS. “However, they need to upgrade to more productive, more energy efficient alternatives if they are to remain competitive in the long run. OEMs who are able to help customers overcome their financial bottleneck by providing an integrated asset financing or leasing facility will secure themselves a distinct competitive advantage.”

Tailored asset financing arrangements, such as leasing and renting, are becoming increasingly popular as they can be flexed by the finance provider to meet the specific business needs of each customer. Regular lease payments can be related to the expected benefits-over-time (improved productivity, access to new markets, operating cost savings from energy efficiency, etc.) gained from an upgraded and extended machine tool system.