Additional information about machinery and equipment financing for the industrial sector: Director of Financing Sami Laukkanen tel. +358 40 544 1626, sami.laukkanen@op.fi
Machinery and equipment financing for the industrial sector
OP Corporate Bank is a leading financier of machinery and equipment investments for the industrial sector.Financing production machinery with hire-purchase financing or leasing frees up your cash flow for other business operations
The lease asset serves as the collateral, eliminating the need to tie up other assets as collateral for the financing. In hire-purchase financing, value added tax included in the price is generally deductible from value added taxes.
Financing brings flexibility to your company's finances
Our financing process is easy and convenient for the customer.
Make use of investment subsidies, such as business funding by ELY Centres
Hire-purchase financing is a generally accepted form of financing when the company applies for investment subsidies.
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When your company is planning new machinery and equipment investments, you can turn to the leading expert in financing for the industrial sector, OP Corporate Bank. This way, your company can get started effortlessly and you will be able to identify the most suitable financing solution for your company's investments. In machinery investments, a typical financing solution is asset-based finance in the form of either hire-purchase or leasing financing. From the company's point of view, asset-based finance of individual machinery and equipment investments is easy and straightforward. As investments grow larger in scale, it becomes necessary to discuss and agree on a financing model that meets the company's overall needs.
In machinery and equipment investments, hire-purchase financing continues to outpace leasing financing in popularity in Finland. The question of which financing option is the most sensible for the company depends on several factors. The choice of financing type is influenced heavily by the planned life span of the asset, in other words for how long the object of the investment will serve the company's production.
Contact the financing provider well in advance to ensure that all of the details related to financing investments are in order. With sufficient foresight and planning, you ensure that the company's investments are on a solid footing.
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Investment financing, or hire-purchase financing for companies, is an excellent financing solution for machinery and equipment investments for the industrial sector
Investment financing is suitable for financing movable fixed assets for business owners, companies and institutions. The main collateral in the financing is the asset to be financed, freeing up the company's real security for other needs.
Investment financing is a convenient way to finance machinery and equipment investments for the industrial sector. Investment financing has also been a generally accepted form of financing when the company has applied for investment subsidies.
Investment financing in a nutshell:
- The minimum amount of financing is 30,000 euros
- The financing period is from 2 to 6 years
- The financing interest can be fixed or variable rate
- The financed asset may be new or used
- The financed asset serves as the main collateral
- The self-financed portion is usually 10% to 30% and may be in the form of trade-in equipment and/or cash.
Benefits and advantages to the customer:
- The financed asset serves as the collateral, freeing up other collateral for other needs
- The value added tax of the asset's price is generally deductible from the company's value added taxes, and normal depreciations apply to the asset
- A generally accepted form of financing when the company applies for investment subsidies.
Financing has been made easy for the company. The customer chooses the asset to be financed and agrees on the sale with the seller. The financing process is convenient thanks to our partnerships with all major machinery and equipment suppliers.
Investment financing is an effective solution for financing machinery and equipment investments for companies of all sizes. The purchased asset serves as the collateral, and the costs of the purchase can be divided into suitable instalments.
The financed asset is treated as owned equipment in the company's accounts. The company enters the asset in its balance sheet and calculates depreciations according to the Accounting Act. The VAT refund can be applied for from the tax authorities immediately based on the sales receipt.
Leasing speeds up your procurement process, makes your outgoings easier to predict, balances your cash flow, allows you to make the most of your assets and boosts your bottom line
With a lease agreement, you only pay for the use of the asset. Leasing provides an easy way to finance investments without putting up any additional collateral. The cost of the asset is spread evenly over time, which makes it easier to predict and manage your business's outgoings and calculate the return on your investment.
Lease payments constitute business expenses that can be deducted from your taxable income. In Finland, leases are considered off-balance-sheet liabilities, which means that they do not appear in your balance sheet and therefore make your key figures look stronger. Leasing supports the transition of customer behaviour from ownership to access.
The customer's lease payments include value added tax, which is deductible in the company's taxation if the lease asset is used in business operations subject to value added tax.
Leasing in a nutshell
OP purchases the lease asset under the terms agreed between the customer and dealership or retailer and leases it to the customer for a fixed term. The typical lease term is between 24 and 60 months, and lease payments, including interest at a fixed or variable rate, are invoiced at intervals of 1 or 3 months. The amount payable each month depends on the purchase price of the asset, the term of the lease and the asset’s residual value, or estimated market price. The first month’s payment may be higher than the other instalments, and this is also taken into account.
Multiple lease agreements can be consolidated into a single monthly payment, with the share of different cost centres itemised in the bills. When the lease agreement comes to an end, the customer can renew the lease, buy the asset for yourself or find another buyer for the asset. If the selling price of the leased asset is higher than the agreed residual value, the difference will be refunded to the customer. In the opposite case, the customer must pay OP for the difference.