As the doors of boardrooms become increasingly open to the idea of additive manufacturing (AM), the financing models of the machinery begin to play an important factor in the decision making. In the world of metal AM companies have to think of more than just the printer, but the material post-processing, powder handling, sieving, software, etc. Can you afford it? What options are out there?
We spoke to Ryan Martin Managing Director from GE Capital’s Industrial Finance team based in Chicago about the topic and since this interview, Ryan has since moved on to become GE Additive North American Sales Leader.
1. You’re a service bureau who has a few industrial plastic machines but you want to look at metal 3D printing, where do you start when it comes to finances?
Much like other business decisions, it’s important to start with understanding the need...in this case for the equipment. We like to start by asking a few preliminary questions:
- What’s driving the expansion into metal 3D printing (new contracts, customer preferences, etc.)? What can metal printing o er you that plastic can’t?
- How important is asset ownership to your company?
- Is technological innovation in 3D printing of interest or a concern for your business over the next three to five years?
- How important is matching financing payments with cash flow?
Once these questions are answered, we can discuss how financing can help address the need. GE Capital Industrial Finance (IF) offers companies looking to adopt new 3D technologies a breadth of flexible financial solutions to help support their business goals.
2. What options are there with financing machinery? Do most people lease or purchase outright, what are the pros and cons of each?
From my viewpoint, more customers are interested in leasing because of the pace of industry innovations and a business’ cash flow. This is especially true for companies interested in going deeper into the additive industry because it gives them the chance to adopt newer models in the future.
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With leasing, customers can benefit from multiple end-of-term options, including ownership, and the possibility for low monthly payments. It also helps free up cash for other business expenses that may not be easily financeable.
A company tends to purchase outright when they know they want to own the equipment over an extended period and they aren’t concerned with the latest technology or future equipment trade-in values. Although there are multiple ways to acquire the latest additive machines, our goal is to competitively price and structure financial solutions for our customers.
3. When you lease a car you’re often limited by mileage and use, is there a similar system in place for metal machines?
We’ve seen the adoption of usage based financing products in some industries such as healthcare but haven’t seen demand for that in the additive industry yet. As the industry matures, we’ll continue to analyse our financial products, adjust to remain competitive and address market trends.
4. With companies like Desktop Metal entering the market offering a sub $200,000 system do you think this kind of lower cost metal system might serve as a gateway to the bigger machinery?
The 3D printing market is dynamic and evolving. We believe that as the industry grows, there will be multiple solutions to address customers’ needs.
5. Has the technology reached a point of maturity whereby people are investing in the same way they would in machine tools like CNC machines? Or do you think there’s still some trepidation with regards to people waiting for the next innovation?
Technological advancements are occurring faster than ever before in nearly every industry including 3D printing, and I think that makes people both excited and cautious. As technology innovates, so will our financial products. With GE Capital working alongside GE Additive, we have the unique expertise in both equipment and finance that can help companies adapt to innovation ... at their pace.
