read

Three Ways to Finance Your Vacuum Equipment

By Gene Ligman
return on investment

Commercial vacuum pumps are expensive — there’s no getting around that fact. Vacuum pumps are a sizable investment for any business, costing anywhere from a few thousand dollars to tens of thousands of dollars.   

If you have an older vacuum pump nearing the end of its lifespan, you probably spend significant amounts of money on repairs each month. Some older vacuum pump maintenance costs can reach several thousands of dollars each month when you consider labor and parts. Add in the downtime for your operation, and the cost of mechanical issues can skyrocket. 

It’s possible that at the end of the lifetime of your current pump, the payment on a new vacuum pump may be lower than your current repair costs. You’ll likely find that your return on investment (ROI) is positive for a new pump purchase too.

But how do you afford that new pump? Should you pay in full, go with installment options, or find another way? Below you’ll find three financing options to consider for your new vacuum pump.

 

1. Traditional Financing

To finance a purchase of this size, you can work with your bank or another financial institution. Working with a lender who already knows you may be your first thought regarding financing a purchase. This is especially true if you have already established a line of credit that can be used for whatever purpose the company sees fit.

Without an existing credit line, securing a loan can come with several downsides, such as potentially lengthy application processes, having to justify your purchase, and high-interest rates for specialty machinery. Additionally, banks impose limits to the credit you can have outstanding.

 

2. Equipment Financing

An alternative to traditional bank loans or lines of credit is dedicated equipment financing companies. Many companies, like Leybold, offer a finance equipment option through a lease agreement that contains an option to buy the equipment at the end of the lease for $1.

These financing options suit all types of companies. With the equipment’s payments spread out over several years, you can pay for the upgraded equipment out of savings on repairs on the replaced equipment. Additionally, you could potentially be cash flow positive on the new purchase in the first month, leading to a high ROI on a new equipment purchase.

 

3. Regional Energy Trusts

Local energy providers fund regional energy trusts. Energy companies contribute to the trusts, and the trusts use the funds to finance loans and grants to local companies. The intent is that the loans and grants are used to fund energy-efficient upgrades. 

If your current vacuum pump is several years old (or older), a new pump is likely more efficient and would qualify for financing through one of these regional energy trusts. However, the rules for securing these grants and loans vary by trust, so make sure to do a little research to determine if you’re eligible. 

 

Worth It

Upgraded machinery can pay for itself in lowered frustration, more uptime, and energy savings. Although it may seem beyond your reach to fund a new vacuum pump, you should consider these alternative ways for financing your new equipment while preserving your cash flow and increasing your ROI.

Let's Talk Through Your Options

Tags: Heat Treatment, Industrial & Process Vacuum, Food

About Gene Ligman

Gene Ligman

Gene Ligman is an engineer with a passion for vacuum applications and equipment. He started his engineering career over 30 years ago in the nuclear power industry where he was first introduced to the utility of vacuum in steam systems and some basic vacuum generating equipment. In the mid 1990’s, he joined Edwards Vacuum where his knowledge of vacuum applications and equipment expanded exponentially.

Having a degree in mechanical engineering with a focus on vapor physics has propelled him to become one of the primary resources in applications where phase change creates complexities above and beyond the normal complexities of vacuum applications. Now with Leybold USA, Gene is a Sales Development Manager for Leybold’s largest and most industrial vacuum generating equipment. He trains the US organization in key insights about how the right vacuum equipment can radically improve the productivity and profitability of vacuum-using factories. These insights, along with his passion for vapor physics make him a leading authority in vacuum system design.

Read more articles by this author

Leak Detection 101

Download our e-Book "Fundamentals of Leak Detection" to discover leak detection essentials and techniques.

MockUp_BookAndPhone