Purchasing water purification systems – Your finance options

Water purification systems for all applications are designed to last for eight to ten years, however with the correct maintenance and care, they will last far longer.

No matter how well maintained they are, there will eventually be a time when your water purification system has either reached their end of its viable operating life or, due to growing demand, needs to be upgraded to increase its capacity.

Although there are usually many factors to be considered, one that is often overlooked – often until the latter stages of discussions – is how best to fund the new equipment. But if you have a good idea at the outset how you’re going organise funding then you’ll be in a better position to choose the best system and handle negotiations with your chosen supplier.

Choose the right water purification partner
Working with a specialised water purification partner is clearly essential, and it is not only the equipment that is important, it is even more important they provide excellent after sales service and support to cover the life of the plant.

They should also be able to offer a choice of funding methods, which are described below.

They should have the knowledge to help you plan and specify a system that meets your current and future needs. They must be able to give you the confidence that not only can they supply the highest quality equipment at the right price, but that they have the resources and experience to be able to ensure that the new system is installed and commissioned on time and within budget.

Most importantly, you need to be certain that they can subsequently support your team in the future with both routine maintenance and emergency engineering services. If you have any doubts, ask to talk to their existing customers. It’s all too common to find that suppliers talk a good game during the sales process but lack the infrastructure or engineers to be able to help you when you need it most – when a system problem has taken your dialysis machines, washer disinfectors or autoclaves off-line and service to your patients has been disrupted.

Find the right financial solution
Let’s be honest: the best water purification technology is not cheap – nor should it be if you’re providing vital purified water supply for your healthcare services or industrial applications.

So, what are your options when it comes to funding your new water purification systems?

Funding via CAPEX
Using the CAPEX budget is perhaps the most common choice; it’s certainly the way that many clients have traditionally funded the purchase of new capital equipment.
Getting sign-off often involves approaching senior management to get existing budget released or to find new budget – a process that can be both challenging, time consuming and, on occasion, disappointing if requests for funds are rejected outright, postponed or watered-down.

Having said that, there are potential advantages to the CAPEX approach, as you will have ownership of the equipment from the outset. You’ll also be free to choose who services and maintains the equipment, either your own engineering department or an approved sub-contractor.

However, at times when all costs, especially CAPEX budgets, are under increasing pressure, then choosing to source new water purification systems from the Capital Equipment Budget may not always be the best option.

Funding via leasing
The leasing model is widely used, from sourcing company cars and IT systems to capital equipment. In this scenario the system is leased over an agreed period at a fixed monthly cost, normally over the lifetime of the system. There is generally no up-front cost or, if there is, it is relatively modest and equivalent to three monthly payments.

The monthly charge normally includes supply, installation and commissioning, with the option to include lifetime service and maintenance and even agreed removal at the end of the period.

• The advantages:
• There is no up-front cost
• The capital cost can be spread over an agreed timeframe, normally 5, 7 or 10 years
• You know exactly what your cost is every month
• A new lease can be taken out at the end of the term, with replacement equipment being installed on a similar basis
• Maintenance and servicing costs can also be built into the lease or negotiated as a separate arrangement
• Ownership transferred at the end of the lease.

This means that cost is easy to manage. Perhaps more importantly, it is normally possible to post the lease charges to OPEX budgets; these are usually easier to access without a complicated chain of approvals. Additionally, many companies or NHS Trusts already have arrangements with approved leasing companies, further simplifying the process.

Funding via a Managed Equipment Service
With this option a third party effectively purchases, manages and maintains the equipment, charging you an agreed service fee on a monthly or quarterly basis. Again, although ownership remains with the service company, you always know what your outgoings will be and the charge can be offset against the OPEX budget.

One potential downside is that Managed Equipment Service companies are rarely specialists in water purification or healthcare. There is therefore a risk that the level of service you receive during the lifetime of the equipment may, at best, be variable. This might be an issue in critical installations, where speed of response and accountability are important.

Ask the experts for advice
Regardless of your preferred funding model, it always pays to talk to experts in the field. The design, manufacture and operation of water purification systems, especially in critical healthcare applications, requires specialised knowledge if they are to deliver the optimum combination of technical performance and commercial viability and return.