Often, small businesses can run into problems with cash flow and end up in a squeeze. High interest rate loans and lines of credit are often taken out in order to rectify the situation, but this scenario could normally have been avoided by leveraging the company assets, instead.
With equipment financing or equipment leasing, longer terms and lower rates can be achieved than with unsecured working capital loans, allowing your company to avoid paying more than it needs to in terms of the overall “cost of capital”.
In order to leverage your company equipment for cash flow, two main strategies can be implemented:
- Finance or lease all of your equipment now or as needed. This simple strategy allows you to keep your company working capital in the bank, rather than depleting it. Purchasing equipment for cash can drain company resources very quickly and leave your company exposed to cash flow issues.
- Fund your company working capital requirements by taking advantage of sale leaseback financing. This type of financing allows you to finance equipment your company already owns outright, taking advantage of longer terms and lower rates, versus unsecured loan products.
Unsecured working capital loans have a place in business lending, but they must always be your last line of defense in funding your working capital requirements. These products represent the highest rates and shortest terms, so they must be used strategically and wisely.
Here at BLS Finance , we have a wide range of business lending solutions available for our clients. If you are currently looking to purchase equipment for your company or are in need of working capital for your business, please feel free to get in touch. (980) 202-7990. Mon. – Fri. 9am – 5pm EST or you can visit our web page at http://www.blsfinance.com/equipment.aspx for more information. We can achieve equipment financing and leasing up to $175,000 and working capital loans up to $3,000,000.