Robotic French fryers. Automated spot welders. Autonomous packaging devices. It seems like there’s an application for robots in nearly every business today. But how can small- to medium-sized companies without Fortune 500 budgets make use of these technologies without breaking the bank?

Leasing robotic equipment can be a great option. With leasing, companies can deploy the latest equipment without a major cash outlay. They can have the newest technology without being stuck down the road with a tool they can’t use. There are lots of advantages to leasing, but it’s important to prepare for financing it.

Robots enhance operational efficiency

Using machines to do jobs humans can’t do – or to do them better – is nothing new. Today’s robots turn those technological advances into enhancements across a facility, driving workplace safety, increasing productivity, and making previously impossible jobs achievable. And they often save money and increase quality.

Robots can sort, assemble, or move just about anything, and they can often do it more efficiently and with fewer mistakes than humans can. With labor shortages being a perennial headache for business owners, robots can be a lifesaver. They can bridge the labor gap while freeing human employees from drudgerous tasks and giving them more time for tasks requiring critical thinking and judgment.

Why lease?

Even with the advantages of using automated technology, cost concerns can hold small- to medium-sized companies back from using it. Coming up with a large cash payment to buy robotic equipment outright can be a deal-breaker for many firms. Leasing, on the other hand, can bring robotic technology within reach without demanding a large outlay of capital. It provides a predictable impact on cash flow that can be worked into most companies’ budgets.

In addition, leasing allows a business to always have the most up-to-date technology. At the end of a lease term, if a new and improved model is available, the lessee can upgrade to it without having to worry about trying to sell or dispose of older equipment. The lessor simply takes the older equipment back and delivers a newer model.

Leasing allows a company to experiment with robotic technology without making a long-term commitment. Many firms start small, just installing one robot for one specific task, before expanding to more. Leasing also provides the opportunity to experiment with different product offerings. A firm can lease the equipment needed to manufacture a new item without fear that the company will be left with a tool it can’t use if the product isn’t successful.

Making the leap without crushing cash flow

Utilizing robots makes a lot of sense, and small- to medium-sized companies can make use of them without needing a big-company budget. With a lease, the lessee makes monthly payments on a regular schedule for a designated lease term. There’s no large cash outlay, and the impact on cash flow is predictable and can be planned for.

How to get financed

Understandably, leasing companies will require a credit check before entering into a lease agreement with a lessee. A lessee should make sure they’re in good shape on the 4 C’s of Credit:

1. Capacity – Capacity refers to the amount of debt a company can sustain.
2. Capital Ratios – The lessor will look at the lessee’s capital ratios to make sure it has sufficient capital and prospects for future cash flow to make the monthly payments.
3. Conditions – This consideration refers to market conditions – both macro and micro. Is the market for the lessee’s products growing? Are similar companies doing well?
4. Character – The last factor (character) refers to the lessee’s credit-worthiness. Does the company have a track record of paying its debts? Is it likely to keep up with payments?

Getting started

A company doesn’t have to be listed on the New York Stock Exchange or the NASDAQ to take advantage of the many benefits of using robots. It starts with interviewing leasing companies and finding one that will make a good long-term partner. It helps to work with a firm that has plenty of experience with robotic equipment and the company’s industry.

With careful planning and a good leasing partner, even a small company can take advantage of automated technology and robots to improve their operations.