Every business has equipment that is specific to its industry, most of which need to be upgraded periodically. Some business owners put off purchasing new equipment as long as possible because of the large upfront expense. However, this can leave a business struggling to remain competitive. Business equipment funding can be an effective solution, allowing you to get the new equipment you need without depleting your working capital.
How It works
Equipment funding is an alternative financing option used to purchase business equipment. A traditional business loan requires using valuable business or personal assets as collateral. With equipment funding, the equipment purchased serves as collateral. Equipment funding provides business owners with the opportunity to obtain the most up-to-date and effective equipment without having to shoulder the entire upfront cost all at once.
Equipment Funding Benefits
In addition to avoiding those upfront costs and not having to put any of your business or personal assets at risk, equipment funding offers other benefits as well.
Maintain Cash Flow – This one of the best benefits of equipment funding. Almost every business owner experiences cash flow fluctuations. Having enough working capital reserved for a downturn in revenue is crucial to the health of a business. Absorbing the entire upfront cost of buying new equipment can leave a business vulnerable when such downturns occur. Obtaining new equipment with funding from an alternative financing company allows business owners to maintain sufficient working capital to cover operating expenses when cash flow fluctuates in a downward turn.
Remain Competitive – In business, you always want to stay one step ahead of your competitors. One of the key factors attaining a competitive edge is to have up-to-date equipment. It allows your business to operate more efficiently, improve productivity and provide your customers with better service. Continuing to use old equipment will eventually cause you to fall behind your competitors and even losing previously loyal customers to them.
Increase Employee Retention – Employees want to be productive and do well at their job. That can be tough when they are working with outdated equipment. It usually means they have to work twice as hard to get the job done. Unfortunately, this can lead to employees feeling unappreciated and unsatisfied with their working conditions. In many cases, those employees seek out other employment opportunities. This increases employee turnover which can have a negative impact on your bottom line.
Maintain Access to Other Credit Opportunities – Even business owners who do their best to plan for cash flow fluctuations can sometimes experience a working capital shortfall. This is the time they often rely on a line of credit to carry them through until there is an upturn in revenue. This option may be unavailable if they have depleted their access to purchase new equipment. Equipment funding will allow you to keep that access open should you need to use it.
Leasing vs. Purchasing
Most alternative finance providers offer two options for equipment funding – Leasing or purchasing the equipment. Each has its own benefits, depending on your industry and the type of equipment you use. Purchasing the equipment allows you to own it outright which can be a better option for equipment with a long lifespan such as farm equipment. Properly maintained, this type of equipment won’t soon become obsolete. On the other hand, because technology equipment is constantly evolving, leasing this type of equipment can be a better option. Leasing may also offer more affordable payments than purchasing equipment.
Equipment Funding with CFG Merchant Solutions
Growing a business and positioning yourself as a major competitor in your industry can be a challenge. It can be even more difficult without having the right equipment. Business equipment funding from CFG Merchant Solutions can be a powerful tool for business growth while also preserving working capital for other expenses and opportunities.
Equipment funding through CFG Merchant Solutions can help keep your business moving forward. We offer a variety of alternative financing options to help your business stay on the cutting edge by providing efficient access to working capital. Don’t wait any longer – contact us to see how we can help grow and fund your business today!