Quite aside from new equipment, with 2020’s unique circumstances, where can you go to support your existing business at a difficult time, and make sure you can remain in business until such time as you can resume the levels of production you had in February 2020?
We’re going to start with your options for funding equipment but read on to learn a little more about particular schemes for the time of coronavirus, which may be more suitable if you need support with your current operations.
There are several ways to fund print equipment, but here are some questions to pose first, to inform which option or options would be the right one(s):
Do you know which technology you need, what it costs, and where to get it?
Have you considered all the workflow software, front end kit and finishing you might need in addition?
Could you make more from your investment with web-to-print, personalisation and/or other variable print?
Will your technology offer the right level of future-proofing (as far as it is possible to foresee)?
Once you know what you need, you need a plan to get it. Most companies offering the kit will be able to work with one or more of the following options:
Leasing print equipment
It’s very common to lease print equipment and the majority of our customers choose the lease route. The lease model offers plenty of advantages, not least that you can spread the cost and avoid an upfront payment which is especially handy if you are looking at high-end production engines.
While the kit will not be yours at the end of the contract, this generally isn’t an issue because by then you might be looking to upgrade to the latest technology anyway, and you won’t have the complications of disposing of the equipment yourself at the end of its life. In theory, you can pay for your lease contract out of the profit the equipment generates between each payment.
The lease/subscription model is also suited to much smaller pieces of equipment. Through our Tech-as-a-Service scheme, you can now lease your laptops, servers, PCs, smartphones and more.
We have a lot of experience with leasing so please ask us questions. It is important that you understand exactly what the contract says and we’re happy to explain everything. Whomever you choose, make sure that any additional costs are transparent including click charges for various colours and sizes, cancellation clauses and the like.
Hire purchase for print equipment
If you have the option of hire purchase, you can spread costs over a term of 12-60 months or more, generally with a deposit at the beginning and fixed monthly instalments. At the end of the agreement, the equipment is yours. As with any contract, read it carefully to understand exactly what you’re signing up to.
Buying print equipment outright
If you have the means or the investors, you may be able to buy your equipment upfront. This has become a little more common in 2020/1 as businesses have been able to take advantage of a variety of grants and loans from central and local authorities as well as other bodies.
Second hand / used production presses
We sometimes place pre-loved production kit with new owners. This can offer significant savings on buying new, as long as slightly older equipment suits your business model and the type of work you plan to do. If you are interested in second hand equipment please contact us.
How do you know which is the right option for you?
The finance options that make the most sense will depend on your circumstances. Are you already running a successful print company? Are you setting up a new print business? Are you looking to invest in specific areas or print markets? Are you buying an existing print business that needs a boost? Do you need help understanding the contracts and leases an existing operation already has?
We have highly-skilled partners that can talk you through your options and guide you through what suits you best. Our specialists are happy to give you free advice and consultancy on your options – there is a form at the bottom of the page if you would like to get in touch.
What about print company funding during the time of Coronavirus?
All of the above said, 2020/1 continues to offer its own particular challenges for businesses of all kinds, including commercial print. At the time of writing (October 2020), there are four loan types/funds from central government that might be worth looking into to support your current business processes or investment plans. Not all of these schemes support new equipment purchases, so it’s worth talking to specialists to understand what could work for you and support your particular needs.
The Coronavirus Business Interruption Loan Scheme (CBILS) for Print Businesses
The Coronavirus Business Interruption Loan Scheme has recently been extended and is now open until 30 November 2020, two months longer than first announced. CBILS is designed for SMEs to access loans or other types of finance of up to £5 million, with 80% guaranteed by the government and fees and interest paid for the first 12 months.
[Edit January 2021: CBILS is now open until 31 March, 2021.]
In order to be eligible, your business must be based in the UK with a turnover below £45 million. You must be able to demonstrate that your business would be viable if not for the pandemic and that it has been adversely impacted by the coronavirus.
Find more information here.
A second CBILS scheme, for medium to large sized businesses with a turnover topping £45 million annually is also available. More details here.
Coronavirus Bounce Back Loans (BBLS) for Print Businesses
The Bounce Back Loan Scheme (BBLS) could be a good option to borrow amounts between £2000 and 25% of your turnover, up to a maximum of £50,000.
The government guarantees 100% of the loan and there is no interest or fees to pay for the first twelve months. The interest rate after the first year is 2.5% and the loan period is six years.
Eligibility for this one is limited to businesses based in the UK that were established before 1 March 2020 that have been adversely impacted by the coronavirus. You can’t apply for this and CBILS at the same time, but in some cases, you can transfer a CBILS loan into BBLS instead as long as you arrange this before 4 November. More information here.
[Edit January 2021: BBLS is now open until 31 March, 2021.]
The Coronavirus Future Fund for Print Businesses
This one is less likely to be applicable but offers loans from £125,000 to £5 million to innovative companies that can match fund from private investors and are pre-revenue or pre-profit.
Find out more about the Future Fund here.
What about more local coronavirus financial support schemes?
In addition to the national schemes outlined above, it is also worth checking with your local authority or Local Enterprise Partnership to see what else may be available to you. We have seen customers access grant funding from local authorities, for example, which has been particularly welcome in these difficult times.
If you are in Norfolk or Suffolk, then New Anglia Growth Hub is worth a visit. For Greater Cambridge and Greater Peterborough, visit The Business Board. Similar bodies can be found right across the country.
Whatever your circumstances, we hope this brief guide has been useful. If you would like further guidance, we recommend talking to finance specialists who understand your own particular business and circumstances. If you’d like to speak to us directly for advice about the future of your print business, please fill in the form below.
Other useful links:
Blog: Invest in print with confidence: future-proof your print room in 2020
Blog: To automate or not to automate? That is no longer the question.
Product: Xerox Versant and Adaptive CMYK+ toner kits
Product: Xerox Iridesse Production Press