Empowering manufacturing with the right investment choice

Posted on 11 August 2025 by Sovereign Labelling Machines

For any business, the decision to invest in new machinery is both a growth opportunity and a significant financial commitment.

Modernising equipment can unlock new capabilities, boost productivity, reduce waste, and help meet evolving customer demands. Yet, the high upfront costs of machinery can be a barrier, particularly in industries where margins are tight and cash flow is king.

Lease finance and purchase options are flexible, cost-effective options that allow businesses to acquire the equipment they need without the burden of a large capital outlay. By structuring investment in a way that supports operational and financial goals, they make modernisation far more achievable.

Below, we detail the options available to you through Sovereign Labelling Machines. For co-packers and brands of all size, they improve access to the latest labelling and sleeving machinery.

Leasing

Lease finance involves ‘renting’ machinery for a set period in return for regular payments. When the lease ends, you can either pay off any remaining balance to buy the machine or, if it’s already fully paid, ownership transfers to you.

Lease finance agreements are tailored to match the company’s cash flow, seasonal production cycles, or revenue projections, offering a level of flexibility traditional bank loans may not provide.

For brands and co-packers wanting to improve their labelling and sleeving capability, this approach means they gain access to the latest technology without committing to the full purchase price upfront.

With cashflow one of the most important considerations for manufacturing businesses, leasing spreads the cost of equipment over time. This keeps more working capital available for immediate operational needs, such as raw materials or staffing.

This in turns help with predictable budgeting. Businesses love consistency and stability, so a fixed monthly payment over an agreed term makes it easier to forecast expenses and plan for the future. Service and Maintenance plans can be incorporated into any agreement, further reducing the risk of unplanned costs.

Another consideration is the rate with which manufacturing technology evolves. Leasing specifically makes it easier for manufacturers to upgrade more frequently, ensuring they remain competitive and benefit from advances in automation, precision, and energy efficiency without being locked into outdated equipment.

Lease payments might also be deductible as a business expense. This can provide an additional financial incentive for businesses to explore leasing as an acquisition strategy.

Purchasing

While leasing offers flexibility, many manufacturers prefer to own their machinery outright. Purchase options – often structured as hire-purchase or equipment loans – allow businesses to spread the cost over a set period.

Hire purchase (HP) agreements are paid off in instalments, while equipment loans see a business borrow funds to purchase the machinery and repay that amount over an agreed term.

Although the monthly payments may be higher than a lease, ownership can be more cost-effective over the machine’s lifetime, especially for equipment with a long operational life and low obsolescence risk.

Ownership from purchasing provides the additional freedom to modify machinery, resell it, or use it as collateral for future borrowing.

Once the finance term ends, the company owns the machinery outright, adding to the its asset base and balance sheet strength.

Your options

Investing in new machinery is often the key to increasing efficiency, improving product quality, and staying competitive in a global market.

Lease finance and purchase options offer practical, flexible routes to acquisition, allowing businesses to modernise without compromising cash flow or overextending resources.

When deciding between lease finance and purchase options, brands and co-packers should consider:

• Cash flow priorities, and ask if the business needs to preserve liquidity for other investments?
• Technology cycles, and how quickly is the machinery likely to become outdated?
• Operational plans, and if the equipment is critical for long-term production or filling a shorter-term need?
• Balance sheet impact, and confirm which option works best for the business and its accounting processes?

The benefits of lease finance and purchase options are amplified when you work with a partner that understands your needs, offers a range of options tailored to you, and can advise the best route for you and your business.

Regardless of whether investing through leasing or purchasing, this strategy turns the challenge of machinery acquisition into a catalyst for innovation and success.

That’s why if you’re considering a machinery investment in the next 12-18 months, you should contact us today to discuss the range of funding options available to you.

You can call us and speak to our team directly on +44 (0)1206 304 182 or email sales@sovereign-labelling.co.uk and a member of our team will follow-up with you and your request.