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In our previous post, we provided an overview of equipment leasing, how it works and why it’s a smart option for sustainable food and agriculture startups. If you haven’t yet read it, go check it out.
In Part 2, we’re going to go a bit deeper and share real-life stories of how companies in your industry have leveraged CSC Leasing’s equipment financing to preserve their equity and grow their businesses.
But before we move forward, let’s recap: Equipment leasing is a flexible low-cost way to finance the type of equipment needed to build and outfit a facility or office space. CSC, for example, offers non-dilutive equipment lease lines ranging from $100,000 to $25 million. (To learn more, visit CSCLeasing.com.)
Now, let’s take a look at the milestones five foodtech and agtech businesses have reached with help from CSC.
1. Bringing a business model to life
An agriculture data company offers a wide range of services including mapping and topographic survey and irrigation and drainage inspection. To do so, the company deploys mobile command centers (MCC) on location, from which operators man a fleet of drones that capture data on the property, analyze their findings and report back to their customers. The MCCs are integral to the business model — but they come with a hefty $220,000+ price tag. Purchasing the MCCs outright would drive up operational costs and create cash flow problems.
CSC extended a $500,000 three-year lease to the company, enabling it to purchase and deploy additional MCCs, so the company can continue to grow.
2. Launching a soil-as-a-service platform
To address food security and climate disruption issues, one agricultural startup, which has developed containerized technology, is on a mission to bolster soil health on a large scale. Manufacturing the equipment, which is placed on-farm, requires substantial upfront costs. Without the ability to scale and deploy these specialized assets, the company couldn’t grow its soil-as-a-service based revenue platform across a broad acreage rapidly.
CSC provided the company with a sale leaseback for the specialized proprietary assets. The company manufactures each asset in-house and CSC reimburses the cost, enabling the company to roll out additional systems to growers across the U.S., who rent them and pay a monthly fee.
3. Moving from the lab to commercialization
A company that develops plant-based food ingredients was ready to take the next step toward commercialization. However, raising more capital to scale commercially was a challenge. The company needed to reduce expenses, conserve cash and create additional liquidity to attract investors.
When the company was still early-stage and pre-revenue, CSC had financed high-priced production equipment, including several mission-critical assets that exceeded the $1 million mark. The equipment was one of the organization’s largest line items and was causing a cash crunch.
Believing in both the company and the product, CSC reworked the original lease terms and provided an additional five years to pay off the remaining balance on the lease, which freed up tens of thousands of dollars per month, providing much-needed liquidity.
4. Building a state-of-the-art facility
An autonomous farm startup was ready to launch its pilot program, a new type of vertical hydroponic farming. The early-stage seed-backed company wanted to expand its operations but didn’t want to use its equity until it had proved out in the market. The company needed an additional $250,000 in equipment to expand operations, but holding on to its equity was a priority.
With an equipment lease from CSC, the startup set up its first facility and — within four months — was onboarding customers and revenue sources.
5. Increasing retail footprint
To expand its production capabilities, a producer of vegan barbeque needed to build a new production facility. To do so, the company would need specialty equipment, including smokers and refrigerators, which would require significant CapEx. It had just raised some venture capital but needed additional funding.
CSC leased much of the equipment required to build the facility. Additionally, CSC was a full-service procurement agent for the business and managed the process of procuring specialty equipment from a long list of vendors so the organization could focus on other priorities.
The company opened a 10,000 sq. ft. facility. Since it has dramatically increased its retail footprint and now has placement in numerous major retailers.
Discover a smarter way to fund equipment and technology
CSC Leasing finances equipment and technology, so you can save your equity for mission-critical expenses.
- Lease lines from $100K up to $25M
- Non-dilutive financing that is non-recourse and doesn’t require covenants or warrants
- Sale leasebacks with up to 100% reimbursement on equipment you already own
- Full procurement service, including equipment pricing and management — at no extra charge
- End-to-end asset management and a free fully customizable web-based asset management tool
Ready to learn more? Contact Senior Director, Pem Hutchinson at phutchinson@cscleasing.com.
