Three Ways to Manage Budget Impact of Equipment
For equipment-intensive businesses, controlling the financial impact of acquiring and maintaining the gear that’s essential to nearly everything you do is a constant challenge. On one hand, your equipment is a primary productivity and profit driver. On the other, it can be a major cause of cash flow and budget headaches.
And, that’s when equipment needs go as planned — which isn’t exactly all of the time, right? Things rise to another level of difficulty entirely when there’s an unforeseen breakdown, or a job opportunity that demands equipment you don’t currently have available in your fleet. It’s almost like someone’s got a thumb on the wrong side of your capital/equipment scale.
Fortunately, there’s an effective way to restore balance — equipment financing.
How to Make Equipment Financing Work Harder for You
What it comes down to is this: Equipment-intensive businesses need an effective tool for making equipment easier to acquire. Many already have one in the form of their preferred equipment financing solution. It’s just a matter of taking full advantage of it.
1. Finance the Entire Equipment Solution - It’s rare that just the equipment itself is all you need. There’s also delivery and installation to think about — and pay for. Don’t forget taxes, fees, service agreements, extended warranties, attachments, supplies, software and so on, which all could be eligible for financing in conjunction with your equipment. It all figures into your total cost of ownership (TCO), and most businesses would rather avoid having a significant part of that TCO coming directly from cash, whether upfront or at some unknown point in the future.
One of the best ways to do that is with the help of a finance provider who can bundle your soft costs, which could include taxes, fees, service agreements, extended warranties and the like, along with your equipment. For example, JLG Financial™ offers flexible financing options that can cover 100 percent of your equipment purchase, as well as up to 20 percent of your soft costs. This versatility gives you better control of cash flow over your solution’s lifespan.
2. Control Credit Line Utilization
Bank credit lines are meant to be a short-term financing facility best used for immediate growth purposes such as hiring or inventory expansion. You invest now, and you see a relatively rapid return on your investment, which helps control your cost of capital. But equipment is a longer-term investment, one that takes a greater amount of time to earn back the money you spend on it. And, as discussed above, equipment is usually only part of the investment.
That’s why dedicated equipment financing is a better solution. For instance, JLG Financial can help you cover everything you need to be productive with your equipment, spreads out your expenses to better match incoming revenues, and it helps keep your credit lines open and ready for shorter-term needs.
3. Ask for Customized Financing
Many businesses experience seasonal revenue and expense fluctuations, as well as business swings and situations that aren’t so predictable. Paying upfront for equipment and coming up with cash for ongoing/unplanned costs just adds complication to a situation that’s already complicated enough. But there’s help available, if your equipment financing solution is flexible enough as many bank credit lines are not.
For example, the next time you need equipment — new or used, any make, model or brand — connect with the financing team at JLG Financial to explore customizations that can give you a great deal of additional flexibility in how you manage the tricky balance between revenue and expenses.
If your business is equipment intensive, financing made expressly for the equipment solutions your business depends on should be a critical part of your operational and growth strategies.