Financial alternatives for weighbridge funding
Published: 10 February, 2012
Investment in capital equipment such as a weighbridge system is tough in the current economic climate. Chris McAllister, product manager at Avery Weigh-Tronix, outlines some alternative financial options.
In tough times you need to ensure that your waste and recycling operations are running as smoothly as possible. It becomes increasingly important to keep track of exactly what comes in and what leaves. With the landfill tax now standing at £56 per tonne, waste management and recycling is more important than ever.
The need for data is essential in knowing and reporting what has been recycled and to measure progress. This is where investment in weighbridges systems is vital. It not only accurately records what comes in and what leaves, but it can highlight any discrepancies, the length of time a vehicle is on site and provide a traceable audit trail.
The weighbridge also ensures that vehicles are loaded to maximum capacity to reduce the number of trips that are necessary, while checking that they are not overloaded to avoid costly fines and legal action.
All of these arguments are well rehearsed, but an investment in a new weighbridge system requires a significant capital investment. At a time of budgetary cuts it is difficult to justify such expenditure on new capital.
Fortunately, just like other major purchases, there are alternatives. Two options worth exploring with your supplier are leasing and rental schemes.
Leasing allows payments to be broken down into weekly or monthly sums, leaving funds for other more urgent requirements. Payments are unaffected by rises in interest rates, which allows accurate budget forecasting.
This option often provides a more feasible solution for many local authorities who require new equipment due to expansion of their waste and recycling operations, replacing old equipment or the desire to increase overall productivity at a site – but do not have the full capital amount available. The combination of longer terms and flexible payment plans make it easier to fit leased equipment into budgets while benefitting from the improved efficiency and productivity that a modern weighbridge solution offers.
Even if a council does have capital available, they may opt to avoid big capital investments by choosing to lease equipment instead. One reason is that they want to maintain cash balances and bank credit lines to cover fixed costs, retain employees and to market their services.
Even operators that need to weigh a small volume of vehicles each day can save a significant amount by choosing to lease a scale rather than visiting a public weighbridge.
Based on 30 weighings a day, an operator would expect to pay around £650, excluding fuel costs and drivers' time. In just four months, the operator would spend the same as the cost of leasing a basic weighbridge and indicator system for an entire year.
Local authorities can also build a maintenance programme into the cost of a lease to ensure that their investment remains up and running at all times.
Another option available from many weighbridge manufacturers is renting. This has many of the benefits of leasing in that you are spreading the cost of a weighbridge over a period of time, while benefiting from the improved efficiency and performance that such a system offers.
Often renting, is a viable option for short-term needs. A typical agreement may be for between 6 -12 months. It may cover a short lived upturn to supplement an existing weighbridge, keep a site running while a weighbridge is being repaired or replaced, or perhaps just be needed for a short term project.
There are some organisations who choose to rent over a long term, again to save capital expenditure and keep funds for other areas. Generally, rented weighbridges can be installed, calibrated and ready to be operational within 48 hours. It is the responsibility of the organisation renting the weighbridge to keep it operational, so maintenance will generally be built into the cost and if it cannot be repaired, it will be replaced.
Many larger manufacturers will have a fleet of weighbridges available for rental. Avery Weigh-Tronix, for example, has more than 50, with a proportion of these regularly available.
An investment in weighbridge systems will pay for itself in the long term. The problem of commiting to such a large capital investment when credit is not readily available and cash balances are crucial, can be overcome by examining other finance options.
Both leasing and rental schemes for weighbridge systems allow sites to benefit from improved efficiency and productivity today, without the commitment of a large capital investment.