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Mills CNC has announced that its Smart Options machine tool rental scheme, which is available on all new Doosan machines, is being increasingly used by precision manufacturers.

The Smart Options rental scheme, administered and managed by Mills CNC Finance, the independently operated machine tool finance arm of Mills CNC, was launched in July 2009 and has, to date, seen eight UK and Irish companies take out rental agreements on new Doosan machines.

Ian Barber, manager of Mills CNC Finance, said: ‘The majority of our Smart Options business has been with SMEs [small and medium-sized enterprises].

‘In all cases, our rental scheme has helped these companies manage to square what, for them, was a difficult but not atypical circle.

‘A significant number of precision manufacturers are busy; they are working flat out and their order books, at least in the short-to-medium term, are healthy.

‘To help cope with this work, many of these companies ideally would like to invest in a new Doosan machine tool as a route to increasing their manufacturing capacity and capability, enabling them to complete manufacturing contracts more quickly and efficiently,’ he added.

However, according to Barber, some companies are reluctant to commit to what they consider to be long-term financial commitments – in other words, investing in a new machine tool via a bank loan, traditional hire purchase or operating lease arrangement.

As a result of this, Mills CNC decided to launch the Smart Options rental scheme, which comes with a number of elements.

The first of these is that the rental of a new Doosan machine must be for 12 months, in the first instance.

Towards the end of the 12-month period, manufacturers have a choice to make: they can return the Doosan machine tool to Mills CNC; they can extend the rental period for a further 12 months; or they can buy the machine and get 100 per cent of the rental payments already made refunded against the original price of the machine.

Smart Option rental payments are GBP30 (monthly repayments) per GBP1,000 and these are combined with the scheme’s ‘No deposit required’ condition.

Machine tool delivery, installation and training are included in the price.

One company that has taken advantage of the Smart Options scheme is Kenard Engineering, a Dartford-based precision subcontractor.

It acquired a Doosan HP 5100 horizontal machining centre in September 2009 via the Mills rental scheme.

Matt Cornford, operations director at Kenard, said: ‘We needed additional milling machine tool capacity quickly to help us fulfil a short-term [eight-month] manufacturing contract that we had won.

‘However, as the contract was finite, we didn’t want to be tied to any long-term financial commitments, which would have been the case if we had decided to purchase a new machine tool.

‘Instead, we decided to rent a new Doosan horizontal [the HP 5100] via Mills’ Smart Options scheme, which gives us the flexibility to hand back the machine to Mills if the short-term contract is not renewed – or to either continue with the rental arrangement for a further 12 months or buy the machine outright depending on what our manufacturing requirements are further down the line.

‘Smart Options gave us instant access to a high-performance machine and, once the rental agreement was signed with Mills, the new HP 5100 machine was installed at our Tewkesbury facility in days,’ he added.

Barber continued: ‘We can work with and help customers consolidate existing finance agreements by, say, extending the terms of a pre-existing arrangement and, as a consequence, reduce a customer’s monthly outgoings.

‘We also work with customers to free up equity capital that they may have tied up in their existing machine tools.

‘By doing this, we can help them find the deposit for a new machine tool or help them restructure their existing financial arrangements so that cash flow and access to working capital is not adversely affected,’ he said.

Mills CNC Finance is not tied to any particular lender so customers can access a range of funding/finance packages and deals on the market.

The company offers flexible terms that can include: low start options; holiday periods; no or low deposit options; and VAT deferments.

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