Published October 4, 2016 | Updated August 9, 2019
One of the best parts of our job is hearing the stories of business owners, especially stories about how the business began and where it’s going. The passion of these business owners is inspiring. But too often they become intimidated when it comes to the thought of financing their vision. And for many businesses, realizing that vision starts with equipment.
Equipment often provides the most scalable method to grow your company. For example, consider revenue-producing assets first rented and then transitioned 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. And while those success stories are fun to share, they begin 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 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 really steep. But what if you took a more incremental approach – one that limits your risk and investment as you grow, 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 long-term 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 growing 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 growing businesses 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.