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Bank Line vs Lease
You’re tempted to use your bank operating line to buy the equipment. Hey, the money’s already there.
Makes sense. Operating facilities are great – they’re pretty flexible too. The money from your operating line works on everything from receivables (margining) to payroll, trade shows and utilities.
Remember though, that all good things come to an end. Even your operating facility has a limit – and honouring those limits is VERY good for your long term banking relationship. We specialize in asset financing – the lease you design with us, saves your operating line so you have money to stock the coffee room. And if your office is like ours, the coffee is pretty important.
Match Play: Revenue - Expenses = Bottom Line
It would be ideal if every time you had to buy inventory, you could pay for the product as you sold it. (that’s usually called “floor planning”; but for most types of business, it’s hard to get). But what if you could MATCH your daily expenses on a piece of production equipment with the revenue generated by that same equipment.? A lease is kind of like a floor plan – you buy the equipment over time.
What if? We’ll tell you what… you wouldn’t have to think too hard about getting the equipment. Game, set, match.
Running Play or Hail Mary? – (sometimes, a good consolidation play is all you need)
Running a business doesn’t always go exactly as worked out in your team huddle. You build a game plan: ie buy equipment strategically, purchase what you can afford, think ahead – in short, Stick to the Plan. Unfortunately, the world’s not familiar with your playbook. Sweet new opportunities or sudden changes can force your hand (quarterback sack, anyone?)
So, you change the rule book on the fly. Order this now to beat the seasonal rush. Run to the auction to get that deal. It works…. for a while.
What happens? A hodgepodge of equipment and mismatched finance contracts; short terms and long life expectancies. But there’s a solution to get you back on track.
Enter the take-out play, which can give new life to your game. Re-finance the entire fleet – on your own terms and time. When the equipment financing meshes with the contribution it makes, and is realistic compared with your cash flow, you’ve just given yourself an advantage.
Touchdown. WITH the conversion.