There will probably come a time when you'll need to apply for financing, whether to obtain capital, lease equipment or simply to set up of a commercial line of credit to prepare for a budget shortfall.

Any number of potential problems may arise during the course of business, forcing your company to seek financing solutions. These factors may include external market forces creating a slowdown, clients not paying invoices on time, or even a simple budgetary error. Thankfully, financing offers a means to overcome these hurdles and come out stronger and more flexible.

To capitalize on the many benefits of commercial financing, it's important to prepare yourself and your company for the application process. Approaching the application process blindly-without any research and preparation-might ultimately lead to you not obtaining the financial solution your company needs. Consider these six tips when applying for financing:

1. Organize your paperwork

No matter how much financing you ultimately need, the lender will require you have the appropriate paperwork in place. You can follow a general rule of thumb: You'll need two to five years of budget information, tax statements and any financial assessments made by a third party, which may result in a quicker assessment.

The sooner you organize this paperwork, the easier the application process will be, allowing you obtain financing more quickly.

2. Finance alternatives

While institutional lenders might seem like a good financing option, a bank is often not the right channel for obtaining heavy equipment or other industry-specific tools.

A captive finance company can provide the solution your company needs along with the equipment knowledge and experience to help guide you to success. Unlike other finance institutions, which are focused on lending money, a captive finance company works within your industry, whether it's construction, mining, agriculture, waste or oil and gas. This insider position ensures the company knows your needs and can make informed recommendations that best suit your organization.

3. Take advantage of the flexibility

When you seek out an equipment finance solution, review the available options and speak with a representative before making your final decision. There are many different options to choose from, each with its own benefits, including:

• Chattel Mortgage
• Commercial Hire Purchase
• Finance lease
• Operating lease

When buying new or used equipment, it's important to know what your company's needs are before you apply so you can find the right financing match. With these various options, you can choose to lease equipment for a fixed period and then have the option to purchase the machinery in full either after a predetermined time or at the end of the contract. Flexibility allows you to find the perfect fit for your company's needs.

4. Pay attention to the business cycles

If your company experiences slow and busy seasons (and chances are it will), then be sure to take these business cycles into account when applying for financing. Incorporating financing options into your annual budgeting allocations can go a long way toward stretching your money during the downtimes.

Another advantage of working with a captive finance company is their understanding and accommodations for flexible payment schedules. A captive understands the cycles of your business and can recommend the right financing solutions to make payment management easier.

5. Stay up to date on technology 

Technological innovations such as digital insights and on-asset technology will help you improve your return on assets and your equipment's overall operational efficiency, while elimatating injuries and waste. Arming your business with solutions to accommodate this will add to your competitive advantage in the market place. At times this may occur at the onset of the purchase of the machine, or it may make more sense to pursue later in ownership. It is important to be mindful of the ever-changing technological landscape and how it may impact your future business needs. 

6. Treat the transaction like a relationship

Working with a captive finance company is much more than a simple commercial transaction. A captive finance company works to build a relationship because these lenders are invested in your firm's success, which means they are committed to finding the solution that benefits everyone. A captive finance company succeeds when you succeed, so it's in their best interest to ensure you get the right solution for your company. With these tips in mind, you can obtain the best financing solution for your company's budget, enhancing you opportunities for success.