Pay Per Use Printer Financing Explained
Paying per square metre instead of buying the machine, and when that is the better deal
Pay Per Use replaces the capital purchase of a printer with a charge per square metre printed. You get the machine, and you pay for what you produce rather than for the asset. It suits shops entering a new application, shops with seasonal volume, and shops that would rather deploy capital into stock, people or premises. It is the wrong answer for a shop already running one machine flat out.
How the model works
Instead of buying a printer outright or financing it over a fixed term, the equipment is placed in your business under an agreement, and you are billed against the square metres you actually print. Volume is metered by the machine itself rather than estimated.
The commercial logic is straightforward. A capital purchase converts cash into a fixed asset and a fixed monthly obligation, whether or not the machine runs. Pay Per Use converts that into a variable cost that moves with your production. A quiet January costs you less. A busy November pays for itself.
Midcomp runs two related programmes. Pay Per Use is the core model. PPUGro is structured for businesses that are growing into a volume rather than already at it, which is the situation most new entrants are in.
What is typically covered
The precise structure depends on the machine and the agreement, and Midcomp confirms terms on enquiry rather than publishing them, because a plotter agreement and a production latex agreement are not the same thing. Broadly, these programmes are designed so that the things which normally surprise a new owner sit inside the arrangement.
That usually means the equipment itself, ink and consumables supply, service and maintenance, and the support relationship. What sits outside is generally media, your own labour, power and premises.
The question to ask, and to get answered in writing, is simple: what invoices will arrive that are not covered by the per square metre rate? A good agreement has a short, clear answer to that.
Comparing the three routes
Buy outright | Finance or lease | Pay Per Use | |
|---|---|---|---|
Upfront capital | Full amount | Deposit, sometimes none | Minimal |
Monthly commitment | None after purchase | Fixed, regardless of volume | Varies with production |
Risk if volume drops | Carried entirely by you | Carried entirely by you | Largely shifted to usage |
Risk if volume grows | You keep all the upside | You keep all the upside | Cost scales with the work |
Service and consumables | Separate contracts | Separate contracts | Typically bundled |
Balance sheet | Asset you own | Asset with a liability | Operating cost |
Best at | High, predictable utilisation | Steady volume, capital preserved | Uncertain, seasonal or new volume |
When Pay Per Use is genuinely the better decision
Four situations where it tends to win.
You are entering a new application. You want to move into soft signage, wallpaper or rigid work, and you believe there is demand but you cannot yet prove it. Buying a machine is a bet on a forecast. Paying per square metre is a test of the market that does not sink your capital if the forecast was optimistic.
Your volume is seasonal. Retail, events, exhibitions and agricultural work all have quiet months. A fixed repayment through a dead season is the thing that kills otherwise healthy print businesses.
Capital is better used elsewhere. If the same money spent on a printer would buy media stock, a second installer, a delivery vehicle or a bigger unit, and those would generate more revenue, the printer is the wrong place for it.
You want predictable costs per job. Knowing your machine cost per square metre before you quote makes pricing straightforward, particularly for tenders where you must commit to a rate for a year.
When it is the wrong choice
An honest article has to cover this.
If you run one machine at high utilisation every month and your volume is stable and proven, buying outright is normally cheaper over the life of the machine. Variable pricing carries the cost of the flexibility it gives you, and if you do not need the flexibility you are paying for nothing.
If your volume is high and growing strongly, the per square metre model can become expensive relative to ownership, and the sensible conversation is about converting to a purchase.
If you have access to cheap capital and a strong balance sheet, and you want the asset and the depreciation, ownership does things for your financials that a usage agreement does not.
And if your production is erratic for reasons inside your business rather than in your market, backup power problems, staff turnover, poor scheduling, then no financing model fixes that. Fix the operation first.
What changes in how you run the shop
A usage-based model quietly changes some daily habits, mostly for the better.
Waste becomes visible. When every square metre printed is a line on an invoice, nesting, tiling efficiency and reprint rate stop being abstractions. Shops on usage agreements tend to tighten their file preparation and their proofing within a few months, because the cost of a careless reprint is now explicit rather than buried in a consumables order.
Quoting gets simpler. You have a known machine cost per square metre, so building a price is arithmetic rather than estimation. That is particularly useful for annual supply tenders where you must commit to a rate well in advance.
Consumables planning changes too. Where ink supply is part of the arrangement, the scramble to find a cartridge on a Friday afternoon largely disappears, and so does the working capital tied up in a cupboard of spare consumables.
The thing to watch is that a variable cost can make it tempting to run work you should decline. A low-margin job still consumes production time, operator attention and machine hours you could have sold at a better rate. Usage-based pricing removes the fixed-cost pressure to keep the machine busy at any price, which is an advantage only if you actually use it that way.
Questions to ask before signing
Take these into the conversation.
What exactly is included in the rate, and what is billed separately? Is there a minimum monthly volume, and what happens in a month below it? How is volume metered and how do I audit it? What is the term, and what are the exit and upgrade provisions? What service response is committed, and does it differ by branch? What happens if my volume doubles, and is there a path to ownership? Who owns the equipment, and what are my obligations for insurance and for the condition it is returned in?
The answers should be specific. If a supplier is vague about minimums or about what falls outside the rate, that is the thing to resolve before anything is signed.
Working out your own number
Do this before any meeting, and it will make the meeting short.
Take your last twelve months of production in square metres by application. Note the highest month and the lowest month, because the gap between them is the value of flexibility to you. Estimate your growth realistically rather than optimistically. Then model three scenarios: the volume you expect, half of it, and double it. Compare ownership cost and usage cost in each.
If ownership wins in all three, buy the machine. If usage wins in the low scenario and ownership wins in the high one, the decision is really about how confident you are in your forecast, and Pay Per Use is a reasonable way to buy time until you know.
Midcomp runs Pay Per Use and PPUGro across the HP Latex, DesignJet and PageWide XL ranges and will model your figures against both routes. The call centre is on 010 020 9999, and the Innovation Hub in Johannesburg is where you can put your own work through the machine before deciding anything.