Increased use of robotics creates finance opportunities

Increasing use of robotics by manufacturers and end-users will generate greater financing opportunities as technology continues to change how business is conducted in the future, according to a new study released by the Equipment Leasing & Finance Foundation.

Its report, Robots, Cobots, and Finance, found that the key elements affecting future financing for robots include their level of autonomy, with robots that can act independently creating the biggest financing opportunities.

Worldwide purchases of robotics are predicted by the research firm IDC to rise at a compound annual growth rate of 22.8% and reach total spending of $230.7 billion in 2021.

The study, based on research by The Alta Group, features a wide-ranging examination of the challenges and growth potential of robots and collaborative robots (“cobots”), and the financing risks for credit, residual values, legal, regulations, and accounting.

It also provides in-depth analysis of the current and future state of robotics in key equipment finance industry segments of agriculture, healthcare, industrial manufacturing, materials handling and transportation, as well as an “other” category that includes exoskeletons, nanobots, military applications, and robotic process automation.

The research suggests that robotics is most likely to become a key technology in the manufacturing, agricultural and materials handling sectors, where there are several standard processes carried out on a repetitive basis. Uptake in the healthcare sector is likely to be slower, as processes are more varied and patients and doctors may express concerns over increased automation.

From an operational standpoint, the financing and leasing of industrial robotics is expected to be very similar to financing for CNC machines, machine tools, and other traditional industrial equipment.

Robots and cobots in this space will continue to have reasonably strong collateral and residual value, because they can readily be reprogrammed and adapted to other uses in the manufacturing process. If required, they can also be repossessed and resold.

Pricing and structuring will likely remain in their current forms and will change in parallel with machine tool and other industrial machinery trends, with some reductions in purchase pricing over time as newer models of robots and cobots become faster, more accurate, and longer-lived, thus extending their useful economic lives and reducing times to profitability.

The research says the jury is still out on the key question of whether, at the end of the day, robotics will increase financing volume, or whether these gains will be offset because robots replace standard equipment operated by human workers.

Thomas Ware, Foundation research committee chair and senior vice-president, analytics and product development, at PayNet, said: “This study indicates that robotics offers opportunities for those willing to get ahead of it.”

Download the study at http://bit.ly/ELFF2019Robotics.