For the smaller company working in the highly competitive metalworking and fabrication sector the question is often not: "Which cutting technology is the best for my business? But rather the more fundamental:
"What can I afford?"
This was certainly the situation at metal fabricator Thornlee Ltd in the West Midlands, UK. The company wanted to invest in new plant that would help develop its business but needed to make the best use of available capital. But by thinking creatively, and looking at leasing alternatives to simple outright cash acquisition, Thornlee has now been able to install a powerful Farley LaserLab Elf cutting and profiling machine, giving it a much greater capability than any other solutions under consideration. The company says leasing has also opened up new markets and given it a leap forward in quality and productivity.
When the time came to modernise its flame cutting capability, Thornlee's first thought was to retrofit the machine with a modern plasma head in an attempt to increase the speed and accuracy of production. Projected cost would be around $20,000.
However, one of the companies Thornlee turned to for advice was Farley LaserLab, just down the road in Sutton Coldfield. Thornlee already knew of the Farley LaserLab Elf plasma profiling machine, since one of its own customers had had one installed, and had been impressed by its speed and operational integrity. Thornlee suspected that the Elf would be the best bet for its business and future expansion, but did not want to tie up all its capital in a new machine.
That is when the company first began to look at the pros and cons of leasing.
Some people are frightened off leasing by the large number of seemingly different lease agreements on offer. But in essence a lease gives a lessee the rights to use an asset for a set amount of time in return for regular payments. At the end of the lease period, the equipment may become the property of the lessee, be sold, or revert to the lessor, depending on the type of agreement.
Leasing the best
The advantage of a lease, particularly for the smaller business, is that a company can choose to install better equipment than it might be able to buy out of its cash funds, with repayments being made from operating profits.
Thornlee decided that leasing certainly seemed to make sense for its own business development and, following an $11,000 initial deposit, the new high-specification Elf plasma profiler was installed.
Now, the accuracy and speed of cutting and profiling have changed beyond all recognition. Using the Elf plasma cutting machine Thornlee has dramatically improved its accuracy in cutting profiles in thinner material - the old gas cutting approach ran the risk of distortion - while the Elf's nesting capability allows material usage to be optimised. Cutting is ten times faster than previously on some material and the Elf is often used in preference to the Shear Accuracy has been boosted to ±0.3mm positioning and ±0.15mm repeatability, which simply would not have been possible by trying to upgrade the old machine.
The speed obviously allows Thornlee to keep its quotes highly competitive while the Elf's precision means the company can compete on a subcontract basis for much higher precision work. Customers are also attracted by Thornlee's flexibility to accommodate fast design changes and product modifications on an economic basis because of the Elf's advanced control system.
The decision to lease or buy should always be made on a company-by-company basis - depending on financial strategy. Typically, in leasing agreements, the deposit involved could be 10-20% of the machine value with payments running at around $22 per $1000 of the remaining outstanding figure. So for a $100,000 cost and a $10,000 deposit monthly payments on this basis would be under $2000/month.
But in Thornlee's case, there is no doubt that leasing the Elf has made possible installation of a top-flight machine that not only processes current work better than any affordable alternative, but that also allows for future expansion into added value work.
