FEATURE Machine building
CHOOSE YOUR FINANCE PARTNER WITH CARE
John Bolton, Sales Manager, Industry, Siemens Financial Services, outlines the OEM/vendor criteria for choosing the best financing partner
T
oday’s pressures on manufacturing equipment companies are immense. Input prices have risen for manufacturing technology companies (‘OEMs’ or ‘vendors’). Energy costs are significantly higher than pre-pandemic1
.
The cost of raw materials and components has inflated. Supply chains have been disrupted and are being restructured to mitigate geopolitical risk2
. New governments across
the globe are creating further uncertainties. And the manufacturing sector itself - the users of OEMs’ manufacturing machines – is experiencing a softening of demand in many parts of the world3
. The global perspective
is important, because most manufacturing equipment OEMs serve international markets. At the same time, though, drivers of demand
are also growing. In particular, digital transformation – the drive to Industry 4.0 – is widely recognised as a ‘must do’ for manufacturers. And that means adopting and investing in new, digitalised manufacturing equipment. There is wide consensus that the cost savings, production efficiencies and competitive advantage gained from digitalisation cannot be ignored. In addition, mandatory corporate sustainability reporting standards are driving demand for more sustainable production (and post-production) machines. In fact, digitally enabled equipment is the technology platform that enables more sustainable production capabilities – less energy use, lower volumes of raw materials, fewer defects, improved uptime through remote maintenance, and so on. Government is also behind the transition to digitalised manufacturing and climate targets.
28 October 2025 | Automation
A new subsidy and tax-break regime was introduced at the last budget, along with major infrastructural developments around clean hydrogen power. Yet despite these positive influences, manufacturers still remain hesitant in many cases to commit to the substantial capital investments required. Manufacturers are not keen to tie up their precious funds in capital equipment that will take some years to deliver full return on investment and more. This hesitancy is understandable. An analysis commissioned by Siemens Financial Services (SFS) of the manufacturing sector as a whole shows that headwinds (negative factors) – especially rising input and labour costs – have inflated more than tailwinds (positive factors such as production and confidence) in the sector.
Nevertheless, the need for manufacturers to invest in digital transformation will not go away. Therefore, OEMs need every technique in the box to help their manufacturing customers feel confident and capable of investing.
Embedding flexible financing options is one of the most powerful ways of making investment in new-generation equipment palatable, and financially sustainable. For example, in a recent research project (commissioned by SFS) among international manufacturing equipment OEMs, 66% said that integrated finance options helped them sell more machines from their sustainable portfolios. On the more general level, another research project revealed that OEMs said integrated finance enabled 20% more sales revenue, and 24% more profitability, than
if products were offered without these financing options4
.
So the broad view from the manufacturing equipment OEM community is that flexible financing options certainly get more deals over the line. By helping the manufacturing customer spread the cost over time, in alignment with the flow of benefits being received from the investment, keeps the manufacturer’s cash free and liquid for agile sales or business growth initiatives. The key question, then, is who to partner with? What are the qualities of a financing partner that will most benefit the OEM? To help the OEM community consider this critical question, we have laid out a few criteria that can help make that choice. 1. Technology and market know-how Knowing how manufacturing technology works helps assess the likely business outcomes that a manufacturer will achieve by investing in each machine or equipment solution. Does your financing partner have that in-depth sector knowledge? Such expertise is critical to their ability to structure a financing arrangement so that it truly fits the customer’s cash-flow profile and aligns payments to likely commercial outcomes. It is a fundamental building block for optimising revenues and profits.
2. Full range of financing tools Smart finance has many underlying components – leasing, loans, invoice-based financing, deferred payments, service contracts, and so on – and can be structured in many ways. Can your financing partner deploy a wide range of financing techniques to cover all eventualities and help you differentiate from competitors? Do they have a track record of experience deploying these techniques in support of manufacturing
automationmagazine.co.uk
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