Materials handling finance

Materials handling finance FAQs

Have a specific question about our materials handling finance services? Find answers to regular queries below or contact the team today. 

• What is materials handling finance?

  What is materials handling finance?

  Materials handling finance involves using forms of asset finance such as leasing, hire purchase, or refinancing to acquire materials handling vehicles and equipment critical to the stability and growth of your business.

  These funds are paid back over the course of your loan, providing stability to your company's cashflow, and removing the budgetary burden of accruing and spending large sums of capital.

  By choosing materials handling asset financing, you can boost productivity, improve your offering, and meet customer expectations, keeping your materials handling business competitive.

  Materials handling finance deals typically use existing assets as collateral for the loan, such as equipment, inventory, buildings, or accounts receivable. Materials handling businesses may also use finance to pay for short-term funding requirements such as paying wages, unexpected costs, or purchasing raw materials.

• How does materials handling finance work?

  How does materials handling finance work?

  Materials handling finance comes in a range of forms:

  Leasing agreements

  Bespoke materials handling equipment leasing agreements allow you or your customers to rent materials handling equipment over the short or medium term via fixed monthly payments. This form of finance protects you from interest and depreciation, without tying up capital, all while keeping bank finance options open and allowing you to categorise leasing rates as a business expense.

  Hire purchase

  With hire purchase materials handling finance, you or your customers pay monthly instalments and gain the option to own your equipment outright at the end of your payment term. This allows you to retain capital and flexibly optimise your payments to the benefit of your balance sheet.

  Refinancing

  A refinancing deal allows you or your customers to free up capital on existing materials handling assets to pay for new equipment. This allows you to use both assets to scale up your business, spread out the cost of improvements, and access equipment not available under hire purchase and rental agreements, all while being balance-sheet-friendly.

• Who is materials handling equipment financing for?

  Who is materials handling equipment financing for?

  Materials handling finance is for any business involved in materials handling.

  This includes construction, manufacturing, and transport businesses with warehousing operations. Companies that use forklift trucks, access platforms, and other vehicles and equipment may also benefit, such as manufacturers and heavy industry.

  If you are a dealer or distributor, providing equipment, vehicles, and technologies to your customers on finance offers them increased flexibility and smoother cashflow, alongside a raft of other benefits. Extra payment options may boost your business in kind.

  Materials handling equipment financing is growing in popularity. In the UK, Finance & Leasing Association members have provided £31 billion of finance to business and public sector organisations - a third of all UK investment in machinery, equipment, and software.

• What are the benefits of materials handling finance?

  What are the benefits of materials handling finance?

  Materials handling finance offers a wide range of benefits to organisations:

  • Simplify cash flow - Materials handling finance enables you or your customers to spend capital elsewhere while still gaining the equipment and vehicles your business needs to succeed. Additionally, interest rates are often fixed, alongside repayments. All this means other business functions do not need to be held back due to the need to save money or protect against interest rate or repayment increases.
  • Stay competitive - Being able to invest in the latest equipment ensures a company can keep pace with customer demands and fend off competition. Allowing it to bring in industry 4.0 innovations like warehouse robotics, artificial intelligence-controlled automation, and digital twins.
  • Reduce business risk - Asset finance lets you or your customers invest in new equipment and thereby reduces the effect of risks such as breakdowns, downtime, maintenance costs and reduced equipment productivity. What's more, failure to pay will only result in the loss of assets.
  • Improve profitability - With a greater amount of higher-quality equipment, you or your customers can increase trade while reducing capital flows and boosting profitability.
  • Smarter accounting - Materials handling equipment financing may allow you to gain a range of accounting and tax benefits compared to purchasing equipment.

• What are the risks of materials handling finance? Is it safe?

  What are the risks of materials handling finance? Is it safe?

  Materials handling finance can be an effective way of upscaling a business, however there are risks that organisations should be aware of before they commit to a finance plan:

  • If the business cannot afford the payments, they may lose the asset. This can threaten business continuity if the asset is critical.
  • Asset valuations can vary - customers may not gain as much for their assets as anticipated.
  • Materials handling asset finance is not typically used for very-long-term investment - funding for this may be difficult to secure.

• Is my business eligible for materials handling finance?

  Is my business eligible for materials handling finance?

  Many businesses are eligible for materials handling finance. Typically, they must be able to meet their financial obligations and have sufficient collateral to back the finance.

  To find out whether your business is eligible to offer materials handling finance deals provided and underwritten by Investec, please contact our experts today.

• What happens at the end of a materials handling finance term?

  What happens at the end of a materials handling finance term?

  The exact requirements for the end of your materials handling finance term depend on the type of term. For minimum and fixed-term financing, you must return your equipment in line with the agreement terms at the end of the minimum or fixed period. For hire purchase finance, you will gain full ownership of the equipment once you have made the final payment.

• Is an initial consultation free of charge?

  Is an initial consultation free of charge?

  Your initial conversation with us is free of charge, so please give us a call or visit and see how we can help you provide materials handling finance to your customers.