Business owners are optimistic these days and many we work with are flexing their entrepreneurial muscles. They’re no longer just maintaining the status quo. In fact, they’re moving beyond core business growth to put expansion plans into action. But for asset-intensive firms, upfront capital requirements of expansion can limit their ability to act on an opportunity.
It doesn’t have to be that way.
In situations that favor expansion, such as we’re seeing, your working capital lines of credit are very important. They allow you to buy new inventories, expand payrolls and open locations before expansion revenues start rolling in. But many times, business owners limit themselves because of how they have used their working capital lines in the past.
Quick, easy access can tempt business owners to leverage working capital lines for acquisitions such as equipment.
For asset-intensive companies, expansion requires new equipment. If you’re a medical provider, that could mean equipment that brings imaging in-house. If you manufacture products, it could mean a new CNC machine. A construction firm? Maybe a boom truck could give you access to more jobs.
But in all these cases, the equipment need presents itself long before matching revenues begin arriving consistently. And outlaying large sums of cash or using your working capital means you can’t leverage those funds to hire, build inventory and ramp up the shorter-term expense required to expand.
The problem is that equipment paid for with your working capital line of credit is a long-term asset funded with a short-term financing facility.
Equipment financing is a better option. You get the payment flexibility to more closely match expenses to revenues, which allows you to preserve your cash and save working capital for opportunities where it’s a better fit.
With the right finance program, you could arrange step payments to make the equipment even more affordable in the early stages of using it. You might even see tax advantages that help drive more ROI to your expansion efforts. And by engaging a dedicated equipment financing professional, you can be more confident that you’re getting the best terms, every time you need equipment.
Here is what one customer said about the importance of the right finance program:
“This is the fourth financing I’ve gone through with LEAF. Our consultant, Paige, handled everything and got our company the best terms over 4 different financing options. LEAF has once again helped our business keep and manage cashflow while helping us acquire new hardware and software.”
Make an equipment lender part of your expansion team. At LEAF, we make equipment more affordable. Our customized finance solutions solve real problems – like putting more revenue-producing equipment in place to power growth without tying up your working capital. To begin a discussion, contact your LEAF Account Champion.