One of the largest metal stamping companies in the nation was looking to expand production capabilities by adding a new press. With a cost in excess of $12M, the new metal stamping press was going to provide enhanced quality and higher output. The press and related equipment and software was expected to take 6-12 months to install.
A portion of the investment entailed “soft” costs, including dismantling and removal of old equipment and the design, planning, and installation of the new press. Despite a fantastic relationship with their banks, they were unable to finance these intangible expenses, and the much-needed expansion was suddenly in jeopardy.
Our team quickly proposed a capital lease that covered the entire investment required, including the necessary soft costs. Installation period financing would also accommodate the down payment and subsequent progress payments required by the vendor, allowing them to manage all outgoing milestone payments with one financing provider. As a result, the deal was able to go through without a hitch. The solution was structured as a 60-month capital lease with a competitive, fixed rate and no fees, allowing the manufacturer to take the depreciation on the equipment. First American provided a dedicated project manager who worked directly with the press vendor on payments and invoicing.
The new press is expected to open production capacity, boosting the company’s bottom line. The company is also now able to capitalize on growth opportunities – including the flexibility to expand into new markets. Indeed, the press has opened a door to an important new chapter in this growing company’s story.