Pharma R&D is often greatly affected by economic downturn and the uncertainty breeds timidity towards investing in innovation. These cautious attitudes are bantered about whenever there is even the smallest bit of less than appealing news in the global macroeconomic outlook. Now enter Brexit, a both legitimate and media-frenzied gift to fueling uncertain mindsets and fear that keeps capital on the sidelines with growth reserved in a favor of preparing for troubling weather. Could there be creative approaches available to the pharmaceutical industry that can keep research teams on the cutting edge of technology, despite the macroeconomic woes?
“The delays in funding that bring many R&D efforts to a halt can be minimized and may be entirely unnecessary” says Roy Royer, Head of UK Business Development for Somerset Capital. “A bit of creativity in how capital is allocated to the use of pharma equipment and technology can ensure alignment with even the most stingy budgets. Whether funding R&D equipment for a short term rental, offering flexible lease turn in provisions that allow for business down turns or simply implementing a longer term, budget-friendly leasing program that preserves precious capital, an equipment-driven financial services provider may be able to help significantly in these uncertain times.”
Pharma R&D equipment fuels growth, efficient operations and even overall profitability for the industry. But the “Great Recession” led to once in a lifetime operational inefficiencies due to aged, outdated and generally un-modernized facilities and assets due to companies reducing capital expenditures to nearly nothing for far too long. Adrian Ivinson, director of Harvard’s NeuroDiscovery Center, is reminded of the shifts underway in the industry every time he looks out of his window. Over the road, the “gorgeous, state of the art labs” no longer house Merck & Co Inc’s (MRK.N) neuroscience team. “They only built it a few years ago and had this wonderful neuro group in there,” Ivinson says. “Now they’re gone.” Could Brexit be history repeating itself?
Roy Royer doesn’t think is has to be. He outlines a recommendation, “Focus on your business needs and determine how you use the equipment. Once your unique needs are sketched, looking to the average bank or equipment finance company relationship may NOT be the place to start. Finding a lender who are “equipment people” that offer competitive financing instead of finance people that lend against equipment is the secret to success.”
This might be an important differentiation. Pharma companies may still remember just how quickly traditional lenders pull back in uncertain times and with Brexit, they may have issues of their own to work out. The equipment-driven lender could move beyond these issues to competitively handle your short and long term needs with maximum flexibility, preserving capital budgets and enhancing cash flow…amidst even the most severe uncertainty.
About Somerset Capital
For more than 30 years, the Somerset family of companies has redefined equipment finance. We take our clients further by providing services around the financing of equipment for mid-sized and large companies throughout the Americas, Asia and Europe. From equipment needs starting under £100,000 and reaching to £25,000,000 and beyond, our unique asset-driven solutions bring a more intelligent approach to your commercial equipment requirements.
Learn more about how we can help your company think bigger and go beyond finance by going to www.somersetcapital.com
