A guide to help your business determine the best way to acquire heavy machinery and equipment
Some construction professionals may believe cash and credit provide different means to the same end: buying equipment, machinery and other assets for a company, as well as addressing additional expenses. It's important that business owners understand the similarities and differences of these two financial assets and the potential benefits and drawbacks of each.
This knowledge is especially vital when making major purchasing decisions, like a new piece of heavy equipment. Let's look at how cash and credit compare:
The most immediate benefit of using your cash reserves to purchase equipment and machinery is the simplicity of the transaction. Your business pays the equipment dealer and you receive the equipment. There's no lease or loan for your organization to enter into, and the new purchase is owned outright.
Of course, cash has some limitations that must be noted. It's a much more finite resource than credit. Very healthy businesses with strong revenue and profit statements can easily encounter occasional periods of time where available cash is limited. Companies that only use cash limit their ability to purchase major resources when they're needed, sometimes significantly.
Solely using cash can conflict with proactive planning of future purchases. This is one of the major ways to avoid delays and out-of-service equipment, which can disrupt operations and have a negative impact on revenue in terms of both consistency and volume. Relying solely on cash also makes it harder to take advantage of potential expansion. If a chance to grow operations presents itself and requires more equipment to be successful, a lack of cash on hand means a slower response time and the potential to completely miss out on the opportunity.
Using cash in this way means avoiding credit for the same purpose, and that reliance only on existing resources - despite the concerns previously outlined - can create a powerful peace of mind. While that attitude is understandable, it doesn't give enough consideration to the many positives and very few negatives of using credit in a responsible and organized manner.
Credit frequently involves some more requirements up front. Compared to situations where businesses have the necessary cash on hand, applying for a line of credit takes a longer amount of time. It also requires more work on the part of the company in terms of sharing financial statements and getting approval. Credit also involves interest payments, and frequently a down payment, as well. These additional factors involved in using credit mean it's not automatically the right choice for an organization looking to make a large purchase.
However, credit offers a number of advantages. For companies with solid financial standing, it's rarely an issue to secure credit for a large purchase. When working with a captive finance company, those advantages expand. Businesses can work with a provider that's intimately familiar with their industry and cooperatively select terms and conditions that meet the unique needs of the business. With a number of variables involved in securing financing for equipment, a captive finance company frequently gives businesses seeking credit the most agreeable terms.
Using credit creates more flexibility for organizations as well, expanding purchasing power by creating a complement to cash on hand. Many companies like to limit the use of cash to specific areas of operation, like payroll, rent and similar considerations.
A line of credit allows businesses to maintain the financial needs tied to those critical aspects of operation while leveraging the credit to make major purchases and create or maintain the capacity to make new purchases. Cash can instead be used to make the monthly payments associated with the line of credit and keep interest payments to a minimum.
Having a fixed line of credit at the business's disposal allows for more overall flexibility, a chance to readily respond to opportunities for growth and to proactively improve machinery and equipment.
To learn more about options for making major equipment and purchases, fill out the Request Information to get in touch with a dealer today..
建設・土木機械のファイナンスに関する詳細な記事、今日の経済状況に対応しビジネスを成功に導くための専門家のヒントをお読みください。
The strategy behind a well-crafted business plan can contribute to operational efficiency and substantial business growth.
詳細Overcome financial hurdles in 4 easy steps.
詳細Choosing coverage for your engine or generator set is as easy as following these four steps
詳細An Equipment Protection Plan (EPP) is one of the best ways to ensure longevity and reliability of new, used and rebuilt Cat® machines.
詳細Heavy equipment theft is a problem across the world, and costs businesses millions every year. Here are 5 steps to help prevent it.
詳細Practical advice to help your business operate more efficiently.
詳細To capitalize on the many benefits of commercial financing, it's important to prepare yourself and your company for the application process.
詳細Learning about heavy equipment leasing options will help you when searching for the best partner company.
詳細Learn how to get a construction backhoe without major upfront costs.
詳細Learn the best practices for keeping your mining equipment in good working condition.
詳細4 Tips to help you improve your bidding strategy to win construction projects
詳細Leverage your budget to identify your company's strengths, weaknesses, opportunities, and potential concerns.
詳細Check out these tips to help you curate a successful team of people.
詳細The financial and operational health of your business influences many actions you take as an owner.
詳細How do you approach business risk? Answering this important question can help you maximize your resources.
詳細Conducting a basic profitability review can help you identify opportunities for growth and where to cut spending.
詳細Both lease and loan options come with advantages, including best-in-class technology along with the ability to optimize your budget.
詳細From tax breaks to supporting those in need, donating machinery may be a great option for your business.
詳細Learn Your End-Of-Term Options And Unlearn Myths Like ‘You Need Perfect Credit’
詳細The unexpected challenges of 2020 have made one thing clear for heavy equipment and machine-centric industries – creative thinking and modified strategies for generating revenue are now more important than ever.
詳細While it might not make sense to repair inexpensive, readily available items, we can all agree that heavy equipment is different.
詳細Leverage the flexibility of skip payments to manage finances for seasonal lulls.
詳細A guide to bettering your business this year.
詳細You have a variety of avenues available for leasing and financing heavy equipment, in almost every industry.
詳細Take advantage of the opportunity to lower your tax obligation.
詳細Early preparedness is your best defense against an economic downturn.
詳細Let's look at the reasons why smaller companies should strongly consider leasing and financing options.
詳細Free and low-cost tech can help you compete in the modern economy
詳細4 Tips to help you minimize unexpected expenses
詳細Sometimes external factors such as industry downturn can derail your business. Here are 3 tips to help keep your business moving forward.
詳細Complete a truck engine overhaul without major up-front costs.
詳細Ensure availability of funds for planned and unpredictable expenses
詳細When is it time to modify your equipment lease agreement? There are several modification options to keep you from breaking your contract.
詳細Equipment insurance can help keep your machinery running and your business moving forward.
詳細Legacy planning is a vital consideration for your business-whether you plan to retire in a few years or a few decades.
詳細Discover how normal wear and tear can impact your heavy equipment.
詳細Winter weather doesn't stop your company from using heavy equipment, but it can have a major impact on how your machinery operates.
詳細Discover what your business can do to protect itself and continue to develop and grow, even in difficult circumstances.
詳細Discover the benefits of financing heavy equipment even when you have the cash to pay in full.
詳細How you prepare for a natural disaster can mean the difference between being in as good of a position as possible to resume operations.
詳細Here are three options for protecting your equipment to prevent unnecessary downtime.
詳細Be prepared for the unpredictable to keep business running smoothly.
詳細Safety should be the number one concern for construction companies of any size
詳細Learn why skid steer loaders are so valuable and versatile on a jobsite.
詳細Learn how equipment technology can help improve business operations.
詳細Leverage telematics from machinery to help improve business operations.
詳細More than just a cost-effective option for your construction business.
詳細Discover key leasing and financing options from potential providers.
詳細Finding the right tools for the job is having the necessary construction equipment financing to fund your efforts.
詳細A strong, consistent, and proactive safety culture can go a long way toward preventing accidents and reducing the negative outcomes.
詳細5 things you need to think about before you sign your rental agreement
詳細A guide to getting the most for your money when renting machinery.
詳細Manage operating expenses and improve your balance sheet.
詳細There are options allowing business owners to more securely manage their finances and spread out the costs while gaining use of the asset.
詳細Increase the likelihood of getting the equipment financing you want at the terms you need.
詳細Maintaining the equipment you acquire through various finance and lease options is vital for getting a consistent return on your investment.
詳細Crafting a strong bidding template can help your company secure work and please clients.
詳細Business owners need to pay attention to a variety of metrics and measurements to stay on top of operations.
詳細A guide to covering your bases from workplace safety to employee engagement.
詳細A guide to help your business determine the best way to acquire heavy machinery and equipment.
詳細Maximize the value created with a purchase by adding used equipment to your fleet.
詳細Learn how this transformative project could affect the global economy.
詳細Don’t bid on jobs that aren’t worth your company’s time and resources.
詳細Discover how the caterpillar pay for use program can improve your daily business operations.
詳細Protect your business against financial loss related to bodily injury, personal injury or physical damage to others.
詳細Advantages of this automated payment option for your heavy equipment loans and leases
詳細Understanding how new connections can transform local, national and global economies.
詳細Looking at the Belt and Road Initiatives's impact on global commerce and its historical precedent.
詳細Growing your business at the right time is critical for your company.
詳細The 10 C's you need to know before you submit your application
詳細情報リースとローンはどちらもそれぞれ独自の長所がありますが、恐らく最も重要なのは、双方ともに予算を最適化しながら、最新のテクノロジーを搭載した新型車両を保有できるという点です。
詳細Conducting a basic profitability review can help you identify opportunities for growth and where to cut spending.
詳細延長保証プランで得られる3つの利点
詳細経験豊富な専属金融会社を利用することにより、建設・土木事業を行う上で得られるメリットがあります。
詳細融資のお申込み前に知っておくべき10のC
詳細を見る当社のマシンファイナンス要件は複雑ではありません。当社が考慮する重要な要因をご確認ください。
確認するビジネスの成長を阻む障害を取り除く方法を模索している場合は、ここでご紹介する4つのステップを参考にしてください。
詳細ファイナンスは、特定の事業運営の障害を乗り越えるための手段です。企業向けファイナンスを利用する際の6つのヒントについて考えてみましょう。
詳細機器リース契約のオプションを検討する最適な時期はいつでしょうか? 契約を破棄せずに実施可能なオプションがいくつかあります。
詳細退任時期が数年後かまたは数十年後かを問わず、レガシープランニングは、お客様のビジネスで考慮すべき重要事項です。
詳細どのようにすれば運転資本やキャッシュフローを改善し、想定内・想定外を問わず発生する経費に充てる資金を確保できるのでしょうか?
詳細