For many companies, traditional loan-based financing remains a well-established and transparent way of funding investments in machinery, plant or material handling equipment. It is particularly suitable for projects where immediate ownership, long-term use and clear allocation on the balance sheet are key considerations.
For companies with a stable balance sheet structure and sufficient credit lines, a loan offers a solid and easily predictable basis for financing.
Loan financing
A tried-and-tested solution with clear structures
Traditional financing (loan)
How does traditional financing work?
In the case of traditional financing, the capital asset is purchased directly and financed via a loan. Repayment is made in regular instalments over a fixed term, comprising interest and a portion of the principal.
The capital asset is usually allocated directly to the company and capitalised.
The benefits of traditional financing
Immediate ownership of the capital asset
Ownership of the machine or plant passes to you immediately upon purchase. You retain full control over its use, service life and strategic future utilisation.Clear, long-term costing
Fixed terms and defined instalments provide a reliable basis for your medium- and long-term financial planning.
Accounting transparency
The capital asset is shown on the assets side of the balance sheet, whilst the loan is shown as a liability. This ensures clarity regarding ownership and financial circumstances.Wide range of applications
Particularly suitable for durable capital goods with long-term prospects for use and stable economic returns.
Points to bear in mind when arranging loan financing
Impact on existing credit facilities
A loan generally draws on your existing credit facilities and collateral with your main bank.
Impact on the balance sheet and credit rating
Capitalising the capital asset and the corresponding liability may alter the equity ratio and, consequently, the bank’s credit rating.
Initial tie-up of liquidity
Depending on the model, own funds or collateral may be required, which can restrict financial flexibility in the short term.
Have we sparked your interest?
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+49 7322 9611–0Please note: TEGEL-TECHNIK puts you in touch with a financing partner. This partner is responsible for providing advice, carrying out credit checks and drawing up the contract.