Published October 4, 2016 | Updated July 30, 2020
One of the best parts about our job is hearing the stories of business owners, especially the stories of how the business began, where it is going, and how they faced challenges along the way.
These days, those challenges are bigger than ever, making the passion of these business owners to push through toward their vision, even more inspiring. But too often, they become intimidated when it comes to the thought of financing their vision. And for many businesses, especially when so many are rethinking processes and retooling in response to changing opportunities, realize that vision starts with equipment.
Equipment often provides the most scalable method to get your business ready for what’s next. For example, consider revenue-producing assets that you can rent to start and then transition to ownership as revenues grow and become more permanent. We’ve seen some customers move from a mini-excavator and a trailer to a fleet of dump trucks and earthmoving equipment. Or from a few laptops to a cooled server room. But while the equipment types run the gamut, successfully getting from Point A to Point B and beyond always begins with a solid finance strategy.
Coming up with that strategy starts with asking yourself some questions. How long are you going to need the equipment? Will you have a long-term business to support the equipment investment? Will you have the staff to keep up with the growth?
These are all questions that might intimidate business owners and make the path to realizing their vision seem steep, particularly in this economic environment. But what if you took a more incremental approach – one that limits your risk and investment yet gives you the flexibility to scale up as needed?
Starting with rental or short-term leasing allows you to return the equipment if needed to minimize the risk of business downturn and avoid lengthy commitments to assets you might not need in the long term.
Then there’s cash. Financing allows you to create a strategy where you pay for what you use, instead of paying for the entire asset. This approach improves cash flow – the most critical financial measure for a company – and preserves cash balances by avoiding lumpy capital expenditures. Financing can also allow for the maximum tax benefits from depreciation and the Section 179 tax deduction. Talk to your tax and accounting professional for details.
Then find a real equipment finance partner, one that understands the needs of businesses like yours and the equipment you depend on. Work with their team to do some planning. They can help you put real numbers to the list of maybes and what-ifs that float around in your head. And from that plan…you are off to the races.
At LEAF, we help you pay for your vision with a simple, fast process and competitive financing positioned to help your business today and tomorrow. What’s your vision? Let’s talk.